Human Capital and Labor Productivity

Abstract

Using a linked employer–employee data set, this study estimates a production function for a sample of seventy Spanish hotels. This function, which identifies the main labor productivity determinants, leads to the conclusion that the more productive hotels in Andalusia are those older than twelve years, have three or more stars, belong to a chain, and subcontract some of the services offered. A chief finding is that a mismatch between the employees’ education levels and the education required for a job is relevant in explaining differences in the hotels’ and workers’ productivity. This result is especially clear when workers with less than five years of service were eliminated from the sample. Suitably educated employees are more efficient than those whose education is not matched to the job. In addition, undereducated employees (as compared to job requirements) are less efficient than overeducated ones. The study also found evidence that hotel employees with an average tenure of more than ten years have superior performance in terms of labor productivity.