Public support for R&D and the educational mix of R&D employees

In this article we assess the impact of public support for R&D activities on the educational mix of R&D employees in private companies. Data on tax incentives in support of R&D activities of companies in Belgium are matched with R&D survey data to investigate changes in the share of R&D employees with a specific degree: PhD, higher education (second stage and first stage, respectively), and other qualifications. Estimations show that public support significantly raises the share of researchers holding a PhD. There are indications that researchers with a PhD substitute for R&D employees with lower degrees. We also show that controlling for the changes in the educational mix of R&D personnel lowers the estimates of the impact of public support on the wages of researchers