The Distribution of Human Capital and Regional Productivity

Abstract

This paper takes a novel approach in estimating the effect of human capital on productivity using a panel data for the NUTS 3 Spanish regions between the years 1996 and 2008. The hypothesis is that, besides the average level of education, how education is distributed in the population also matters to productivity level and growth. We use available data on the share of the population in each level of education to compute measures of inequality and skewness of the distribution in each region. Our findings suggest that inequality in educational attainment and, in particular, the degree of skewness of its distribution matter in explaining the variation in regional productivity.