The effect of human capital on labour productivity of farms in Poland

Abstract

This study aims to determine the relationship between total, average and marginal human factor productivity and the level of education of a farm manager in Poland. The study was carried out based on unit empirical data from the monitoring of the Polish Farm Accountancy Data Network (FADN) and covered the four Polish FADN macro-regions: Pomorze & Mazury, Wielkopolska & Slask, Mazowsze & Podlasie and Malopolska & Pogórze. The study involved the Cobb-Douglas production function method. Using the relationship between total production (in PLN) of a farm and the aggregated production factors such as total labour input in AWU (Annual Work Unit), area of arable land (ha) and fixed assets (PLN), labour productivity was determined based on the level of education of the farm manager. The results indicate that the flexibility of production in relation to the labour factor was significantly higher in the group of farms managed by farmers with higher-level education in two out of four analysed macro-regions and on a national scale. In addition, human capital approximated by the level of education had a positive effect on the average and marginal productivity of the analysed farms.