Productivity, Human Capital Formation Policy, and Redistribution: Do Government Policies Promote Productivity?

37 Pages Posted: 13 Jul 2012 Last revised: 30 Jul 2012

See all articles by Takayuki Sakamoto

Takayuki Sakamoto

University of Kitakyushu - Department of Policy Studies

Date Written: 2012

Abstract

Productivity is the most important determinant of national wealth and standards of living. Scholars have shown that different welfare production regimes pursue distinct human capital formation policies to promote productivity. But do those government policies actually promote the productivity of the economy? This paper analyzes whether such policies improve multifactor productivity in industrial democracies, after briefly presenting a human capital investment explanation for why they should help productivity. It finds that family and education policies promote productivity. Evidence of pro-productivity effects of ALMP is not detected. While the provision of public services with redistributive effects is productivity-enhancing, direct redistribution with taxes and transfers itself does not improve productivity, once other human capital formation policies are controlled for. Thus, the analysis finds good reason for governments to pursue human capital policies to promote productivity and ultimately standards of living, but they should do so selectively by choosing appropriate policy tools.

Keywords: Productivity, human capital formation policy, skill investments, family and education policy, redistribution, welfare production regimes

Suggested Citation

Sakamoto, Takayuki, Productivity, Human Capital Formation Policy, and Redistribution: Do Government Policies Promote Productivity? (2012). APSA 2012 Annual Meeting Paper. Available at SSRN: https://ssrn.com/abstract=2105392

Takayuki Sakamoto (Contact Author)

University of Kitakyushu - Department of Policy Studies ( email )

Kitakyusyu
Japan

HOME PAGE: http://www.geocities.jp/sakamoto_pol/

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