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Measurement Error in Education and Growth Regressions

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  • Miguel Portela
  • Rob Alessie
  • Coen Teulings

Abstract

The use of the perpetual inventory method for the construction of education data per country leads to systematic measurement error. This paper analyzes its effect on growth regressions. We suggest a methodology for correcting this error. The standard attenuation bias suggests that using these corrected data would lead to a higher coefficient. Our regressions reveal the opposite. We discuss why this is the case. Copyright © The editors of the "Scandinavian Journal of Economics" 2010 .

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9442.2010.01613.x
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Bibliographic Info

Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 112 (2010)
Issue (Month): 3 (09)
Pages: 618-639

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Handle: RePEc:bla:scandj:v:112:y:2010:i:3:p:618-639

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References

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  1. Frank Windmeijer, 2000. "A finite sample correction for the variance of linear two-step GMM estimators," IFS Working Papers W00/19, Institute for Fiscal Studies.
  2. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
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Citations

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Cited by:
  1. Tiago Neves Sequeira & Nuno Ferraz, 2008. "Is Education prejudiced by Country-Risk? A Panel-Data Study using Attainment Data and Country-Risk as a Rational Expectation," Working Papers de Gestão, Economia e Marketing (Management, Economics and Marketing Working Papers) e01/2008, Universidade da Beira Interior, Departamento de Gestão e Economia (Portugal).
  2. Thijs van Rens, 2002. "Education, Growth and Income Inequality," CESifo Working Paper Series 653, CESifo Group Munich.
  3. Sunde, Uwe & Vischer, Thomas, 2011. "Human Capital and Growth: Specification Matters," Economics Working Paper Series 1131, University of St. Gallen, School of Economics and Political Science.
  4. Tiago Sequeira & Elsa Martins, 2008. "Education public financing and economic growth: an endogenous growth model versus evidence," Empirical Economics, Springer, vol. 35(2), pages 361-377, September.
  5. Christian Morrison & Fabrice Murtin, 2009. "The century of education," LSE Research Online Documents on Economics 51583, London School of Economics and Political Science, LSE Library.
  6. Joachim Ragnitz & Stefan Eichler & Beate Grundig & Harald Lehmann & Carsten Pohl & Lutz Schneider & Helmut Seitz & Marcel Thum, 2007. "Die demographische Entwicklung in Ostdeutschland : Gutachten im Auftrag des Bundesministeriums für Wirtschaft und Technologie," ifo Dresden Studien, Ifo Institute for Economic Research at the University of Munich, number 41, October.
  7. Michael S. Delgado & Daniel J. Henderson & Christopher F. Parmeter, 2011. "Does Education Matter for Economic Growth?," Working Papers 2011-13, University of Miami, Department of Economics.
  8. Christian Morrisson & Fabrice Murtin, 2009. "The Century of Education," CEP Discussion Papers dp0934, Centre for Economic Performance, LSE.
  9. Christian Morrisson & Fabrice Murtin, 2009. "The century of education," Working Papers halshs-00586751, HAL.
  10. Bas van Leeuwen & Peter Földvari, 2011. "Capital accumulation and growth in Central Europe, 1920-2006," Working Papers 0023, Utrecht University, Centre for Global Economic History.
  11. Bergheim, Stefan, 2007. "Pair-wise cointegration in long-run growth models," Research Notes 24, Deutsche Bank Research.

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