Schooling, Production Structure and Growth: An Empirical Analysis on Italian Regions

This paper analyses the growth effects of high levels of human capital at the industry level. By favouring technology adoption, human-capital-intensive industries grow faster compared to less human-capital-intensive industries in regions that have higher levels of human capital. We use data for six macro sectors of manufacturing industries in the twenty Italian regions for the period 1971-2003; the results show positive and significant effects of human capital levels and growth rates on value added growth. This result is robust to a series of sensitivity checks such as other measures of growth and different indicators of human capital. This finding is particularly important for Italy, as it has always had a model of industrial specialization focused on the traditional sectors which have a low content of technology and human capital.