Effectiveness of higher education to labor productivity

The purpose of this study is to empirically examine the contribution of higher education to labor productivity at the national level, using company-based panel data. The panel data from 1990 to 2007 was used, which was from the national panel institution Korea Information Service - Financial Accounting System (KISFAS). The analysis result reveals a highly positive relationship from 1990 to 2007 between the change of the rate of people with higher education among the economically active population and sales per person. The analysis of panel data also shows that the increase of the economically active population with higher education has a positive influence on labor productivity (sales per person). These results are significant in that they are the basic information to activate the human resource development at the level of a nation or a company.