1. Human resources Human resources in Croatian manufacturing: situation, changes, and effects

2.   structure of the work-force in manufacturing by skill or education: changes 2000-2007; spec. ref. to the share of the highly educated   effects of high education on earnings in manufacturing   demand for the highly educated in technical fields   effects of the current crisis on demand   issues regarding recent and future supply of, and demand for, the highly educated Overview

3.   available data refer to registered employment in firms (not including small trades and crafts)   data have been gathered by establishment surveys, describing situation at end of March   classification problems: criteria not clear; a mix-up of various old classifications; difficult to interpret   roughly divided: workers with formal education, and manual workers with mostly on-the-job-training   manual workers mostly trained on the job: highly skilled, skilled, semi-skilled and unskilled   formally educated: with high (4-year tertiary) education, higher (2-year tertiary), medium (secondary), and lower education Skill structure of the work-force in manufacturing

4. TypeLevel Share in total (%) Change (p. points) 20002007 Formally educated High education7.28.51.3 Higher4.04.30.3 Medium29.740.510.8 Low4.23.9-0.3 On-the-job trained Highly skilled4.73.3-1.4 Skilled24.019.2-4.8 Semi-skilled7.85.5-2.3 Unskilled18.413.2-5.2

5. Skill structure of the work-force in manufacturing - men TypeLevel Share in total (%) Change (p. points) 20002007 Formally educated High education7.58.20.7 Higher4.44.60.1 Medium26.239.513.3 Low3.12.8-0.3 On-the-job trained Highly skilled7.14.7-2.4 Skilled29.423.7-5.6 Semi-skilled6.95.4-1.5 Unskilled15.411.1-4.3

6. Skill structure of the work-force in manufacturing - women TypeLevel Share in total (%) Change (p. points) 20002007 Formally educated High education6.79.42.6 Higher3.34.00.7 Medium34.644.09.4 Low5.75.80.1 On-the-job trained Highly skilled1.31.0-0.3 Skilled16.612.5-4.1 Semi-skilled9.15.9-3.2 Unskilled22.717.3-5.4

7.   highest share of workers with high or higher education in 2007 in the following industries: - manufacture of office machinery and computers (35.6%) - manuf. of radio, television and comm. equipment (30.8%) - manuf. of other electrical machinery and apparatus (25.9%)   share of the highly educated increased most strongly in the latter two of the above industries (8.2 and 8.0 p.p) over the period 2000-2007 Skill structure of the labour force in manufacturing

8.   effects of the skill structure on earnings can be investigated using regional data on workers in manufacturing, by gender   very strong correlation between the share of workers with high or higher education in total number of male workers and the average wage of male workers   control variable – average wage of female workers, supposedly “collecting” the impact of all other factors (physical capital, technology, etc.)   partial correlation is also strong for female workers but weaker than for males   findings based on this specification imply that high education strongly affects productivity and earnings Effects of the skill structure

9.   effects of high education on earnings are stronger among males than among females probably due to different content (field, subject) of education   among workers with high or higher education, males are probably more trained in technical fields   examples: mechanical, electrical and electronic engineering   no systematic data on this, but some evidence shows that persons educated in those fields are in relatively high demand in the labour market   not many engineering graduates register with the employment service, but those that register find a job very soon,and those that don’t have already found it Demand for technical skills

10.   situation changed already in the second part of 2008: the highly educated in technical fields are no longer at the top of hiring   economic crisis strongly hit manufacturing industries (more on that in other presentations)   all categories of workers have been losing jobs, including the highly educated   first quarter 2009 / first quarter 2008, inflow of the newly unemployed coming directly from manufact.: all workers: +87.2% with higher education: +67.4% with high education: +111.3% Effects of the current crisis

11.   graduates from tertiary schools of mechanical, electrical and electronic engineering – approx.: 2004: 1,596 2005: 1,903 2006: 2,045 2007: 2,412 - clear positive trend, but more accurate data needed   the enrolled in the above schools – approx.: 2004: 16,141 2005: 15,771 2006: 14,479 2007: 14,258 - clear negative trend – a matter of concern Recent and future supply of the highly educated in technical fields

12.   Croatia becoming a member of the EU – expected effects in the manufacturing sector: - greater competition - stronger integration – deeper specialisation and higher returns to scale - larger investments, particularly in high-tech equipment   above developments will lead to higher demand for the educated in technical fields   some possible supply problems: EU membership can increase the “brain drain” – Croatia could lose some of the highly educated in technical fields Future demand for the highly educated in tech. fields and some supply problems

13.   share of the highly educated in manufacturing work- force is growing very slowly, esp. among men   share of the highly educated strongly affects productivity and earnings in manufacturing   number of tertiary-level graduates in technical fields is growing, but the number of the enrolled is declining   current crisis has reduced demand for all workers in manufacturing, including the highly educated   EU membership will increase demand for the highly educated workers in manufacturing but it could increase “brain drain” too   recommended: stimulating enrolment in tertiary education in technical fields, and investment in high- tech physical capital that is complementary Summary and recommendations