Productivity, R&D Spillovers and Educational Attainment*

Economists have long agreed that the local availability of a more qualified workforce generates significant spillovers. This study suggests that these externalities may arise because plants by having access to a more qualified workforce at a regional level, can benefit more from R&D spillovers than those located in areas with less qualified workforce. This hypothesis is tested on a sample of British establishments drawn from the Annual Business Inquiry over the period 1997–2002. The main results are consistent with our expectations that the regional differences in the industry-level educational attainment of the workforce available to a plant will condition its capability of absorbing R&D s…