The Impact of Skill Mismatch on AggregateProductivity:cross-country analysis in OECD economies
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
The present study explores the relationship between skill mismatch in twomain categories, numeracy and literacy, and aggregate productivity as derivedfrom a decomposition of productivity into within-rm productivityand allocative eciency. Skill mismatch is considered a rather persistentphenomenon with long lasting eects in various aspects. In the analysiscovered, OECD Survey of Adult Skills (PIAAC) database was employed forthe aggregated indicators of skill mismatch while productivity was measuredusing ORBIS commercial database. The key ndings reveal a strong andnegative relationship between skill mismatch in numeracy and productivity,which stems from a negative relationship between the same category and thewithin-rm labor productivity. Under-skilling in numeracy exhibits a negativeeect on productivity while over-skilling seems not to be related in thecurrent specication. Based on the relationship between competition andproductivity, market power is used to control for the competition in dierentsectors. The results suggest that higher market share translates to higherproductivity and the relationship is statistically signicant.
Place, publisher, year, edition, pages
2016. , 64 p.
skill mismatch, aggregate productivity, PIAAC, ORBIS, allocative eciency
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-189561OAI: oai:DiVA.org:kth-189561DiVA: diva2:946878