Regional Economic Growth and Human Capital: The Role of Over-education

Abstract

Ramos R., Surinach J. and Artís M. Regional economic growth and human capital: the role of over-education, Regional Studies. This article analyses the link between human capital and regional economic growth in the European Union. Using various indicators of human capital calculated from census microdata, it is concluded that the recent economic performance of European regions is associated with an increase in over-education. In fact, measures of educational mismatch seem to be more strongly connected to regional economic performance than do other traditional measures of human capital stock.

Ramos R., Surinach J. and Artís M. 区域经济成长与人力资本：过度教育的作用，区域研究。本文分析欧盟人力资本与区域经济成长的关联性。本研究使用人口普查微数据中计算的各类人力资本指标推断：欧洲区域近期的经济表现与过度教育的增长有关。事实上，教育不匹配的程度似乎与区域经济表现更加相关，而非其他传统的人力资本度量。

区域经济成长 人力资本 教育不匹配 过度教育

Ramos R., Surinach J. et Artís M. La croissance économique régionale et le capital humain: l'impact de la suréducation, Regional Studies. Cet article cherche à analyser le lien entre le capital humain et la croissance économique régionale dans l'Union européenne. Employant divers indicateurs du capital humain calculés à partir des microdonnées de recensement, on conclut que la performance récente des régions européennes est fortement liée à une augmentation de la suréducation. En effet, il semble que les mesures de l'inadéquation des compétences sont liées plus fortement à la performance économique régionale que ne le sont d'autres mesures traditionnelles du stock de capital humain.

Croissance économique régionale Capital humain Inadéquation des cométences Suréducation

Ramos R., Surinach J. und Artís M. Regionales Wirtschaftswachstum und Humankapital: die Rolle der Überqualifikation, Regional Studies. In diesem Beitrag untersuchen wir die Verbindung zwischen Humankapital und regionalem Wirtschaftswachstum in der Europäischen Union. Mit Hilfe von verschiedenen, aus Zensus-Mikrodaten berechneten Indikatoren des Humankapitals kommen wir zum Schluss, dass die aktuelle Wirtschaftsleistung der europäischen Regionen mit einer zunehmenden Überqualifikation einhergeht. Die Maßstäbe der Bildungsdiskrepanz scheinen sogar stärker mit der regionalen Wirtschaftsleistung zusammenzuhängen als andere traditionelle Maßstäbe der Ausstattung mit Humankapital.

Regionales Wirtschaftswachstum Humankapital Bildungsdiskrepanz Überqualifikation

Ramos R., Surinach J. y Artís M. Crecimiento económico regional y capital humano: el papel de la sobreeducación, Regional Studies. El artículo analiza la relación existente entre el capital humano y el crecimiento económico regional en la Unión Europea. A partir de la consideración de varios indicadores de capital humano calculado a partir de microdatos de distintos censos, concluimos que el crecimiento económico de las regiones europeas está asociado con un incremento en la sobreeducación. De hecho, las medidas de desajuste educativo parecen estar más relacionadas con el crecimiento económico regional que otras medidas tradicionales de dotación de capital humano.

Crecimiento económico regional Capital humano Desajuste educativo Sobreeducación

Keywords:

• Regional economic growth
• Human capital
• Educational mismatch
• Over-education

JEL classifications:

• O18
• O47
• R23

Acknowledgements

The research leading to the results given in this paper received funding from the European Community's Seventh Framework Programme (FP7/2007–2013) under Grant Agreement Number 216813. The authors gratefully acknowledge the support received from the Spanish Ministry of Science through Project Numbers ECO2010-16006 and ECO2009-12678. The usual disclaimer applies. This research was based on the Integrated Public Use Microdata Series International (IPUMS-I) database (Minnesota Population Center, Integrated Public Use Microdata Series, International: Version 6.1 [machine-readable database], University of Minnesota, Minneapolis, MN, 2011). The authors wish to thank the following statistics offices for providing the underlying data that made this research possible: National Bureau of Statistics, Austria; National Institute of Statistics and Economic Studies, France; National Statistics Office, Greece; Central Statistics Office, Ireland; National Institute of Statistics, Portugal; and National Institute of Statistics, Spain.

Table B1. Equivalence between educational levels and number of schooling years

Notes

The quality of these data has also been called into question (de la Fuente and Doménech, 2006).

For a review, see Duque et al. (2006).

See http://bibliography.ipums.org/.

Easily obtained from the nine homogenous categories that are considered: Less than primary completed; Some primary completed; Primary (six years) completed; Lower secondary general completed; Secondary, general track completed; Some college completed; Secondary, technical track completed; Post-secondary technical education; and University completed.

At a three-digit level of detail (more than 400).

As previously mentioned, as schooling levels in each country have been homogenized as part of the IPUMS-I project, the equivalence between educational levels and number of schooling years is quite straightforward (see Table B1 in Appendix B).

However, it is worth mentioning that there are significant differences between the educational indicators and Eurostat's Regional Education Statistics. The results of the different comparisons mentioned in the text are available from the authors upon request.

It is assumed that the educational requirements of a certain workplace are identical across regions in the same country, but that they can vary over time. A similar assumption is adopted by the few studies analysing over-education at the regional level, such as those by Jauhiainen (2011) and Lenton (2012).

In a similar way to the ORU (Over-Required-Under) specification of the Mincer equation commonly used in the economics of education literature (Duncan and Hoffman, 1981).

Studies considering the regional dimension of over-education are scarce. In fact, the relationship between over-education and geography has been systematically ignored in the literature. To the authors' knowledge, the only link between the two is related to the differential overqualification theory which suggests that over-education basically affects married women since their job search is restricted to the local labour market in which they live, while their husbands can search for jobs more in keeping with their level of education in a wider labour market (Frank, 1978). Recent studies from this perspective include Büchel and van Ham (2003) for Germany, Hensen et al. (2009) for the Netherlands, Quinn and Rubb (2011) for the United States, Sanromá and Ramos (2011) for Spain, and Croce and Ghignoni (2011) for Italy. It is worth mentioning that although these studies take into account the geographical dimension in their analysis, all focus on the individual level.

See http://www.ilo.org/public/english/bureau/stat/isco/isco88/major.htm/. These groups include the following: 4, Clerks; 5, Service workers and shop and market sales workers; 6, Skilled agricultural and fishery workers; 7, Craft and related trades workers; 8, Plant and machine operators and assemblers; and 9, Elementary occupations.

Full details of the results at the regional level are available from the authors upon request.

As Temple (2001) highlighted, this specification is preferred to the analysis of the relation between the change in output and the change in education as in this case causality could run from output (or anticipated output) to education, and not vice versa. As long-run changes in average educational attainment are driven by government policy, it seems plausible that as output and tax revenues increase, governments will often allocate more resources to education, and attainment will rise for a transitional period. This critique does not apply to the specification between output growth and the initial level of human capital as considered here. The use of schooling years (instead of enrolment rates; and the use of panel data) makes it more unlikely that reverse causation could explain the positive and significant effects of human capital and growth (de la Fuente and Doménech, 2006).

This result is robust to the inclusion of the average schooling levels in the region as an additional control variable. The reason for including this control is that it might be thought that the positive and significant sign of the percentage of over-educated workers could be related to the greater presence of educated workers.

It would have been interesting to have included controls related to regional innovation capacity, but information from Eurostat is not available for the considered regions. Full results are available from the authors upon request.