An Empirical Test of the Role of Technological Progress on the Share of Employment of Higher Educated Labor Force

In recent years, there has been a rapid increase in unemployment rate of university graduates. One of the feasible resorts to solve this problem is to increase skill intensity in industrial activities. In this study, an experimental test has been conducted to determine the role of technological progress on skill intensity in establishments with 10 employees and more. To this end, the model pertaining to the share of employees with higher education is estimated by using panel data for the period 2006-2013 at the level of ISIC two-digit code and econometric fixed effects method. The results of the estimated model, using EGLS, indicate that the effect of technological progress – in form of indices of ratio of R&D capital to value added and ratios of computer and Internet users – on the share of labor with higher education is significant and positive. In addition, control variables such as firm size have significant and positive effect on the share of employment of higher educated labor, while index of labor intensity has a significant and negative effect on it.