High-skilled workforce and firm-level productivity: an exploratory analysis

Analyses 4 Paolo Fornaro, Mika Maliranta

Abstract

We examine the relationship between the change in the share of employees with a higher education degree and productivity growth in Finland between 2008 and 2022, at the firm level. In particular, we identify the share of workers graduated from STEM fields (science, technology, engineering, and mathematics) and business-related disciplines, finding that young high-tech companies have hired a significant number of graduates from these two groups, during the 2010s. Our results show a strong association between the growth in the share of STEM-educated employees and productivity growth, although this effect becomes clearly visible only after a lag of two to three years. In contrast, an increase in the share of employees with a higher education degree in business-related fields has a more immediate impact on productivity, even though the relationship weakens quickly. These findings suggest that increasing the number of highly educated employees is essential for driving productivity growth.