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Endogenous Growth, Human Capital, and Industry Wages

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  • Winter-Ebmer, Rudolf

Abstract

Lucas' model (1988) of external effects of human capital formation is taken as a starting point for looking at the impact of human capital on wages. Even though most empirical tests of New Growth Theory are made using time-series and cross-sections of countries--with good reasons--I suggest a microeconometric approach in order to test Lucas' basic assumption of external effects of human capital. As a first step, internal effects of education are filtered out by using wage functions for individuals in Austria. In the second step, resulting industry wage premiums are regressed on industry-specific characteristics and, above all, on average human capital in the industry to account for external effects of human capital. Copyright 1994 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Bulletin of Economic Research.

Volume (Year): 46 (1994)
Issue (Month): 4 (October)
Pages: 289-314

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Handle: RePEc:bla:buecrs:v:46:y:1994:i:4:p:289-314

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Cited by:
  1. Rudolf Winter-Ebmer & Josef Zweimueller, . "Intra-firm Wage Dispersion and Firm Performance," IEW - Working Papers 008, Institute for Empirical Research in Economics - University of Zurich.
  2. Kevin Reilly & Luisa Zanchi, 2002. "Industry Wage Differentials: How Many, Big and Significant Are They?," Labor and Demography 0209001, EconWPA.
  3. Gruetter, Max & Lalive, Rafael, 2009. "The importance of firms in wage determination," Labour Economics, Elsevier, vol. 16(2), pages 149-160, April.
  4. Shields, Michael P., 2008. "Why Should State Government Invest in College Education? An Equilibrium Approach for the US in 2000," IZA Discussion Papers 3569, Institute for the Study of Labor (IZA).
  5. Kirby, Simon & Riley, Rebecca, 2008. "The external returns to education: UK evidence using repeated cross-sections," Labour Economics, Elsevier, vol. 15(4), pages 619-630, August.
  6. Chris Sakellariou & Ramin Maysami, 2004. "Lucas type external effects of human capital: strong evidence using microdata," Applied Economics Letters, Taylor & Francis Journals, vol. 11(6), pages 343-346.
  7. World Bank, 2003. "Lifelong Learning in the Global Knowledge Economy : Challenges for Developing Countries," World Bank Publications, The World Bank, number 15141, October.
  8. Winter-Ebmer, Rudolf, 1996. "Wage curve, unemployment duration and compensating differentials," Labour Economics, Elsevier, vol. 3(4), pages 425-434, December.

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