Science, Technology, Engineering, and Math (STEM) effect on GDP in EU countries: Labor force perspective

Abstract

This paper analyzes the impact of Science, Technology, Engineering and Math (STEM) workforce on GDP in EU countries as a proxy for what could happen in Azerbaijan. We first estimate the effect of STEM labor force, which is measured by number of workers in STEM occupations, on GDP in 28 EU countries for 1992-2015. We use STEM labor force as the basis for innovation and productivity in a country as opposed to educational attainment used mostly for developed countries. Then, we use the estimated marginal effects to quantify the potential contribution of STEM labor force on GDP per capita in Azerbaijan. It was found that adding 44,000 STEM jobs (28% increase) in STEM labor force in Azerbaijan, is predicted to cause $1944 increase in GDP per employee which corresponds to $1102 in GDP per capita approximately.