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CEP discussion paper
Educational Attainment, Labour Market Institutions, and the Structure of Production
Stephen Nickell, Stephen J. Redding and Joanna Swaffield September 2002
Paper No' CEPDP0545:
Full Paper (pdf)

JEL Classification: F0;J0;O3

Tags: de-industrialization; educational attainment; factor endowments; labour market institutions; specialization

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.