Educational mismatch and productivity: evidence from LEED data on Italian firms

This study aims at evaluating the impact of educational mismatch onto firm-level productivity for a large set Italian firms. In particular, over (under)-education refers to situations where individual’s attainment is higher (lower) than education required by job, thereby producing surplus (deficit) education. Based on integration LEED (Linked Employer Employee Database) Istat Statistical Register Asia Occupazione – which provides information workers’ age, professional qualification and Frame-SBS Register, we perform an analysis in spirit ORU (Over, Required Under Education) model proposed Kampelmann e Rycx (2012). The dataset based panel 55,000 manufacturing services firms with more 20 employees, covering 2014-2019 period. empirical strategy two-step procedure: first, indicators are computed worker-level; second, estimate (value added per employee) function key variables interest collapsed firm-level, taking into account both firm workers characteristics. estimated GMM-system Arellano Bond (1995) Blundell (1988). Main results point out that over/under-education affects growth firms: firm’s rises following one unit increase mean years over-education spiking medium high-tech –, whereas under-education hampers dynamics high medium-high tech knowledge-intensive