Discussion Paper 1

Human Capital Formation and Continuous Training: Evidence for EU countries

Mary O'Mahony

University of BIrmingham



This paper links data on continuous training from the EU LFS to information on skill levels and earnings from the EU KLEMS growth and productivity accounts, to examine the relative magnitudes of continuous workforce training versus human capital formation through the general education system in the European Union. The results suggest that in the EU15 group of countries intangible investments in training represent just under 2% of GDP or about 35% of expenditure on general education. The share of GDP accounted for by training is less than a third as large in the new member states. A growth accounting method is employed to show that failure to account for informal training leads to a significant underestimate of the impact of human capital on output growth in the EU.


Paper published on private website November 2010, released onto public website December 2010


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Judith Harris


Birmingham Business School
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Birmingham B15 2TT




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This project is funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities.

Grant Agreement no:244 709

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