The positive labour productivity externalities that arise from a post-secondary qualification or training

Abstract

The aim of this article is to estimate, compute and determine the magnitude of positive labour productivity externalities (defined as unintentional positive labour productivity spill-over effects) generated by employees with a post-secondary education or training (post-grade 12). The research is deemed necessary given the important debate on the shortage of higher-skilled employees and the impact of this on the creation of positive labour productivity spill-over effects in the workplace. Logarithm wage equations for different skill levels and for different geographical areas are derived and estimated in order to determine the existence and magnitude of positive labour productivity externalities created by employees with a post-secondary qualification or training. Higher-skilled employees who have a post-secondary qualification or training and who are employed in a geographical area in which post-secondary education or training institutions are denser tend to create significant positive productivity externalities in the workplace.