Human Capital and Growth in the European Regions. Does Allocation

Abstract: The paper examines the relationship between the allocation of human capital among different activities and economic growth in the context of the European regions. A proxy of the allocation of the labor force to technical activities is constructed using data about occupations at the regional level and included in cross section growth regressions together with various educational variables (primary, secondary and higher education years and shares). The main results of the paper are the following: the educational variables become insignificant when country dummies are included in the regressions suggesting that, due to differences in the national education systems, they capture the effects of some omitted country specific variable; on the other hand a robust correlation emerges between the allocational variable and the regional rate of growth in the period 1981-91