DP3068 Educational Attainment, Labour Market Institutions and the Structure of Production

Author(s): Stephen Nickell, Stephen J. Redding, Joanna K Swaffield
Publication Date: November 2001
Keyword(s): de-industrialization, educational attainment, factor endowments, labour market institutions, specialization
JEL(s): F00, J00
Programme Areas: Labour Economics, International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=3068

A key feature of OECD economic growth since the early 1970s has been the secular decline in manufacturing’s share of GDP and the secular rise of service sectors. This Paper examines the role played by relative prices, technology, factor endowments and labour market institutions in the process of ‘de-industrialization.’ We find a statistically significant and quantitatively important effect of levels of educational attainment. Furthermore, the production structure responds differently to the educational attainment of men and women. Finally, countries with stronger levels of employment protection are shown to adjust more slowly to changes in prices, technology and factor endowments.