Labour Productive

In: Business and Management

Submitted By dw214
Words 4496
Pages 18
Labour Productivity in the European Union:
Innovation, Education and Investment

Section 1 - Introduction
The unique phenomenon of the European Union has attracted much attention from academics, diplomats and policymakers ever since its founding in the 1950s as the European Coal and Steel Community, with 6 member states. In 2009 there are 27 member states, and a large number of countries around the world have association agreements with the EU, notably those countries of the Mediterranean and the developing world. The goal of the EU is to become ‘the most competitive and dynamic knowledge based economy in the world’ (El-Agraa 2004: 433). Standard economic theory dictates that innovation, education and investment will be instrumental in the achievement of this goal. It is my intention in this essay to assess the impact of these factors upon labour productivity within the European Union member states. The explanatory variables that I have decided to look at are as follows: • The percentage of adults in training • Public spending on research & development (as a percentage of GDP) • Science and technology graduates per 1000 population • Internet access at home (percentage of population) • Foreign Direct Investment (net inflows as a percentage of GDP) • Public spending on education (as a percentage of GDP)
These variables will be assessed against the dependent variable of labour productivity, for which an index series is used, with 100 representing the EU-27 as a whole. Economic theory would predict all of my explanatory variables to have a positive effect on labour productivity, and it is this which I am going to investigate using statistical analysis.

The 27 member states of the European Union can be considered a natural sample, and although the number of observations is small, I expect my data to be informative within the context…...

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