| By: |
Nilsson, Pia (Research Institute of Industrial Economics (IFN));
Andersson, Hans (The Swedish University of Agricultural Sciences);
Heldt, Tobias (Center for Tourism and Leisure Research, Dalarna University) |
| Abstract: |
Using matched employer–employee data, this paper provides evidence from an
industry that is gaining attention due to its contributions to rural and
regional growth and preservation of permanent grasslands. The equine industry
exemplifies a rural industry where specialized knowledge is central to the
experiences, products and services provided, but where there is little
evidence of the productivity gains associated with skilled labour. We apply
control function and IV methods for estimating a long-run production function
(2010-2022) that accounts for simultaneity bias and adjustment frictions in
rural labour markets. Several variables are used to measure firms’ access to
skilled labour, such as the employment share with specialized training in
horse breeding and hippology, the accumulated stock of occupation-specific
experience for all workers belonging to a firm and firms’ access to a local
pool of skilled labour. Results show that occupation-specific training is
associated with an average productivity premium of 11% across firms in the
industry. Examinations of intra-industry heterogeneity reveals large
differences and it is only firms specializing in horse racing that can obtain
productivity advantages by increasing the share of workers with specialized
skills. The results of this paper have implications for policy and the
investment decisions made by firms. |
| Keywords: |
Human capital; Skills; Firm productivity; Rural Economics |
| JEL: |
D22 D24 J24 Q10 |
| Date: |
2025–02–21 |
| URL: |
https://d.repec.org/n?u=RePEc:hhs:iuiwop:1522 |