Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-13T19:58:50.966Z Has data issue: false hasContentIssue false

CATCH ME IF YOU LEARN: DEVELOPMENT-SPECIFIC EDUCATION AND ECONOMIC GROWTH

Published online by Cambridge University Press:  14 September 2016

Fabio Cerina*
Affiliation:
University of Cagliari and CRENoS
Fabio Manca
Affiliation:
CRENoS
*
Address correspondence to: Fabio Cerina, University of Cagliari, Department of Economics and Business, Viale Sant'Ignazio 78, 09123 Cagliari, Italy; e-mail: fcerina@unica.it.

Abstract

This paper presents a theoretical and empirical investigation of the relationship between human capital composition and economic growth. In the theoretical analysis, we allow for nonconstant returns to scale in technological activities. Differently from previous literature, our results show that, under broad and plausible model parameterizations, the marginal growth effect of skilled workers is increasing with the distance to the frontier for sufficiently poor countries while it is decreasing (in agreement with the existing literature) only for countries close to the technological frontier. Our empirical analysis provides robust evidence for this theoretical prediction by using a 10-year panel of 85 countries for the years in between 1960 and 2000, as well as by using the System Generalized Methods of Moments (GMM) technique to address the problem of endogeneity. Results are robust to different proxies of human capital and different specifications.

Type
Articles
Copyright
Copyright © Cambridge University Press 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We would like to thank Philippe Aghion, Luca Deidda, Alessio Moro, Fabiano Schivardi for their suggestions and all the participants at the seminar at the University of Cagliari, University of Sassari, and University of Barcelona as well those at the conferences in Huelva (XIV Encuentro de Economia Aplicada), Saint Petersburg (DEGIT XVI), New Delhi (8th Annual Conference on Economic Growth and Development), Rimini (4th Workshop on Developments in Macro and Growth), Bologna (54th Meeting of the Italian Economists Association), and Manchester (125th Royal Economic Society Conference). E-mail addresses: fcerina@unica.it and fabio.manca@ec.europa.eu. The research leading to these results has received funding from the Regional Government of Sardinia under “Legge 7 (2007)” grant. The views expressed here are solely of the authors and do not reflect the official position of any of the affiliated institutions.

References

REFERENCES

Acemoglu, D., Aghion, P., and Zilibotti, F. (2006) Distance to frontier, selection and economic growth. Journal of the European Economic Association 4, 3774.Google Scholar
Aghion, P., Boustan, L., Hoxby, C., and Vandenbussche, J. (2009) The Causal Impact of Education on Economic Growth: Evidence from U.S. Brooking Papers on Economic Activity. Available at http://www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_aghion_etal.pdf.Google Scholar
Andersen, T. G. and Soerensen, B. E. (1996) GMM estimation of a stochastic volatility model: A Monte Carlo study. Journal of Business and Economic Statistics 14, 328352.Google Scholar
Ang, J., Madsen, J., and Islam, M. (2011) The effects of human capital composition on technological convergence. Journal of Macroeconomics 33, 465476.Google Scholar
Arellano, M. and Bond, S. (1991) Some tests of specification for panel data: Monte Carlo evidence and an application to employment Equations. Review of Economic Studies 58, 277297.Google Scholar
Arellano, M. and Bover, O. (1995) Another look at the instrumental variables estimation of error components models. Journal of Econometrics 68, 2951.Google Scholar
Arrow, K. J. (1962) The economic implications of learning by doing. Review of Economic Studies 29, 155173.Google Scholar
Baier, S. L., Dwyer, G. P., and Tamura, R. (2006) How important are capital and total factor productivity for economic growth? Economic Enquiry 441, 2349.Google Scholar
Barro, R. J. and Sala-i-Martin, Xavier (1997) Technological diffusion, convergence, and growth. Journal of Economic Growth 2, 126.Google Scholar
Benhabib, J. and Spiegel, M. (1994) The role of human capital in economic development evidence from aggregate cross-country data. Journal of Monetary Economics 34, 143173.Google Scholar
Benhabib, J. and Spiegel, M. (2005) Human capital and technology diffusion. In Aghion, P. and Durlauf, S. (eds.), Handbook of Economic Growth, pp. 935966. Amsterdam: Elsevier.Google Scholar
Bils, M. and Klenow, P. J. (2000) Does schooling cause growth? American Economic Review 90, 1160–83.Google Scholar
Blundell, R. and Bond, S. (1998) Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics 87, 115143.Google Scholar
Bond, S. (2002) Dynamic Panel Data Models: A Guide to Micro Data Methods and Practice. Working paper 09/02, Institute for Fiscal Studies.Google Scholar
Bowsher, C. G. (2002) On testing overidentifying restrictions in dynamic panel data models. Economics Letters 77, 211220.Google Scholar
Chen, L. K. and Tao, Z. (1999) The impact of public policies on innovation and imitation: The role of R&D technology in growth models. International Economic Review 40, 187207.Google Scholar
Coe, D. and Helpman, E. (1995) International R&D spillovers. European Economic Review 39, 859887.Google Scholar
Cohen, D. and Soto, M. (2007) Growth and human capital: Good data, good results. Journal of Economic Growth 12, 5176.Google Scholar
Cohn, E. and Addison, J. T. (1998) The economics returns to lifelong learning in OECD countries. Education Economics 6, 253–30.Google Scholar
Davidson, C. and Segestrom, P. (1998) R&D subsidies and economic growth. Rand Journal of Economics 29, 548577.Google Scholar
Griliches, Z. (1990) Patent statistics as economic indicators: A survey. Journal of Economic Literature 28, 16611707.Google Scholar
Kiviet, J. F. (1995) On bias, inconsistency, and efficiency of various estimators in dynamic panel data models. Journal of Econometrics 68, 5378.Google Scholar
Kortum, S. (1993) Equilibrium R&D and the decline in the patent-R&D ratio. American Economic Review: Papers and Proceedings 83, 450457.Google Scholar
Kortum, S. (1997) Research, patenting, and technological change. Econometrica 65, 13891419.Google Scholar
Krueger, A. and Lindahl, M. (2001) Education for growth: Why and for whom? Journal of Economic Literature 39, 11011136.Google Scholar
Ichino, A. and Winter-Ebmer, R. (1999) Lower and upper bounds of returns to schooling: An exercise in IV estimation with different instruments. European Economic Review 43, 889901.Google Scholar
Jones, C. (1995a) Time series tests of endogenous growth models. Quarterly Journal of Economics 110, 495525.Google Scholar
Jones, C. (1995b) R&D-based models of economic growth. Journal of Political Economy 103, 759784.Google Scholar
La Porta, R., Lopez-de-Silanes, F., and Shleifer, A. (2008) The economic consequences of legal origins. Journal of Economic Literature 46, 285332.Google Scholar
Mansfield, E., Schwartz, M., and Wagner, S. (1981) Imitation costs and patents: An empirical study. The Economic Journal 91, 907918.Google Scholar
Mitchell, B. R. (1998) International Historical Statistics: Europe, The Americas, Africa, Asia and Australia 1750–1992. New York: Stockton Press.Google Scholar
Nickell, S. (1981) Biases in dynamic models with fixed effects. Econometrica 49, 14171426.Google Scholar
Papakonstantinou, M. (2014) Composition of Human Capital, Distance to the Frontier and Productivity. IARIW papers. Available at http://www.iariw.org/papers/2014/PapakonstantinouPaper.pdf.Google Scholar
Psacharopoulos, G. (1994) Returns to investment in education: A global update. World Development 22, 1325–43.Google Scholar
Psacharopoulos, G. and Patrinos, H. (2004) Returns to investment in education: A further update. Education Economics 12, 111134.Google Scholar
Romer, P. (1990) Endogenous technological change. Journal of Political Economy 98, S71S102.Google Scholar
Roodman, D. (2009a) A note on the theme of too many instruments. Oxford Bulletin of Economics and Statistics 71, 135158.Google Scholar
Roodman, D. (2009b) How to do xtabond2: An introduction to difference and system GMM in stata. Stata Journal 9, 86136.Google Scholar
Segerstrom, P. S. (1998) Endogenous growth without scale effects. American Economic Review 88, 12901310.Google Scholar
Squicciarini, M. and Voigtlaender, N. (2015) Human capital and industrialization: Evidence from the age of enlightenment. Quarterly Journal of Economics, forthcoming.Google Scholar
Temple, J. (2001) Growth effects of education and social capital in the OECD countries. OECD Economic Studies 2, 57101.Google Scholar
Vandenbussche, J., Aghion, P., and Meghir, C. (2006) Growth, distance to frontier and composition of human capital. Journal of Economic Growth 11, 97127.Google Scholar
Young, A. (1998) Growth without scale effects. Journal of Political Economy 106, 4163.Google Scholar