Arbeitspapier

Human Capital and the Size Distribution of Firms

Countries that have relatively fewer workers with a secondary education have smaller firms. The shortage of skilled workers limits the growth of more productive firms. Two factors influence the availability of skilled workers: i) the education level of the workforce and ii) large public sectors that predominantly hire individuals with a better education. We set up a model economy with a government and private firm formation where production requires unskilled and skilled jobs. Workers with a secondary education are pivotal as they can perform both types of jobs. We find that level of education and public sector employment account for 40-45% of the differences between the United States and Mexico in terms of average firm size, GDP per capita, and GDP per hour worked. We also show that the impact of public employment on skill premiums and productivity measures depends on the skill bias in public hiring.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 8268

Klassifikation
Wirtschaft
Human Capital; Skills; Occupational Choice; Labor Productivity
Public Sector Labor Markets
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Fiscal Policies and Behavior of Economic Agents: General
Macroeconomic Analyses of Economic Development
Thema
firm size
educational attainment
skill complementarities
public employment
college premium
high school premium

Ereignis
Geistige Schöpfung
(wer)
Gomes, Pedro Maia
Kuehn, Zoë
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2014

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Gomes, Pedro Maia
  • Kuehn, Zoë
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2014

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