Education for Growth: Why and for Whom?
Alan B. Krueger
Journal of Economic Literature
no. 4, December 2001
This paper summarizes and tries to reconcile evidence from the microeconometric and empirical macro growth literatures on the effect of schooling on income and GDP growth. Much microeconometric evidence suggests that education is an important causal determinant of income for individuals within countries. At a national level, however, recent studies have found that increases in educational attainment are unrelated to economic growth. This discrepancy appears to be a result of the high rate of measurement error in first-differenced cross-country education data. After accounting for measurement error, the effect of changes in educational attainment on income growth in cross-country data is at least as great as microeconometric estimates of the rate of return to years of schooling. Another finding of the macro growth literature--that economic growth depends positively on the initial stock of human capital--is not robust when the assumption of a constant-coefficient model is relaxed.
Krueger, Alan, B., and Mikael Lindahl.
"Education for Growth: Why and for Whom?"
Journal of Economic Literature,
Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Human Capital; Skills; Occupational Choice; Labor Productivity
Analysis of Education