EDUCATION AND PRODUCTION IN THE UNITED KINGDOM

Helen Jenkins

Nuffield College, Oxford University

 

August 1995

 

Summary

This paper establishes a testable model of a production function which captures the relationship between output and the stock of human capital, measured as workforce qualifications. The analysis vindicates investment in education by suggesting that highly-qualified workers can be up to twice as productive as those with no qualifications. A redefinition of productivity measures to include human capital calls into question the 'Thatcher miracle', suggesting that productivity growth in the 1980s was actually very similar to that under Labour governments of the 1970s.