DP5334 Skills, human capital and the plant productivity gap: UK evidence from matched plant, worker and workforce data

Author(s): Jonathan Haskel , Denise Hawkes , Sonia Pereira

Publication Date: November 2005

Keyword(s): productivity , skills

JEL(s): D24 , J24 , L6

Programme Areas: International Trade and Regional Economics , Labour Economics

Link to this Page: www.cepr.org/pubs/dps/DP5334.asp

Using two matched plant level skills and productivity datasets for UK manufacturing we document that (i) more productive firms hire more skilled workers: in 2000, plants at the top decile of the TFP distribution (controlling for their four-digit industry) hired workers with, on average, around 1/3rd of a year of additional schooling compared to firms in the bottom decile and (ii) in an accounting sense the skills gap between the firms in the top and bottom deciles of the TFP distribution accounts for 3 to 10% of the TFP gap depending on the specification used.