American Economic Review: Vol. 102 No. 7 (December 2012)


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Human Capital Prices, Productivity, and Growth

Article Citation

Bowlus, Audra J., and Chris Robinson. 2012. "Human Capital Prices, Productivity, and Growth." American Economic Review, 102(7): 3483-3515.

DOI: 10.1257/aer.102.7.3483


Separate identification of the price and quantity of human capital has important implications for understanding key issues in economics. Price and quantity series are derived for four education levels. The price series are highly correlated and they exhibit a strong secular trend. Three resulting implications are explored: the rising college premium is found to be driven more by relative quantity than relative price changes, life-cycle wage profiles are readily interpretable as reflecting optimal human capital investment paths using the estimated price series, and adjusting the labor input for quality increases dramatically reduces the contribution of MFP to growth. (JEL D91, I20, J24, J31, O47)

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Bowlus, Audra J. (Social Science Centre, U Western Ontario)
Robinson, Chris (Social Science Centre, U Western Ontario)

JEL Classifications

D91: Intertemporal Consumer Choice; Life Cycle Models and Saving
I20: Education and Research Institutions: General
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
J31: Wage Level and Structure; Wage Differentials
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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