05 Empirical Examining of the Effects of Human Capital Components on Labor Productivity in the Services Sector; Evidence based on Quantile Regression (QR)

The importance of surveying the relationship between human capital and labor productivity is major at the macroeconomic level. Since the service section has a high share in the economy, this issue becomes more important. In this regard, in the paper, we have been studied the impact of different dimensions of human capital (education, health, and experience) on improving the workers' productivity of the service section in the micro level. In this order, we emphasize the individual characteristics of employees in this sector. We use the net income received from the wage earners and salaried workers in the private sector of services section (as a proxy for the labor productivity) to estimate an econometric model for the Iranian economy. In order to estimate Quantile Regression (QR), Households Income and Expenditure Survey is used for urban areas in 2013. The results show all dimensions of human capital (education, health, and experience) have a positive and significant effect on the productivity of labor (or net income) among wage earners and salaried workers of the service sector in different quantiles. In addition, in various quantiles, not only the coefficients of health indicators are more volatile, but also the coefficients of these indicators in many quantiles, especially in the lower half, are higher than the other indicators of human capital. In Q1, the rate of labor productivity response to health indicators is higher than that response in the higher quantile (Qh).