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Delayed Effects of Graduate Education on Increased Productivity

Author

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  • John Simister

    (Senior Lecturer, Department of Accounting, Finance & Economics,Manchester Metropolitan University.)

Abstract

Human Capital Theory’ shows that education is a vital part of improving productivity. This paper investigates effects of tertiary education (post-school education: at universities, higher-education colleges, and similar institutions) on how productive an employee is. A problem with such research is to identify which variable is the cause, and which is the effect. This paper uses time-series regression analysis of World Bank data, on the fraction of a country’s workforce with tertiary education, and productivity. This paper also uses Britain as a case study: the British Household Panel Study shows what happens to a graduate in the years after they leave university. The delayed effects of education on output makes clear that education is a cause (rather than an effect) of improvements in productivity. In conclusion, university-level education is beneficial to economic growth.

Suggested Citation

  • John Simister, 2014. "Delayed Effects of Graduate Education on Increased Productivity," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 2(2), pages 55-65, April.
    • Handle: RePEc:lrc:lareco:v:2:y:2014:i:2:p:55-65
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    File URL: http://journalofeconomics.org/index.php/site/article/view/53/185
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    More about this item

    Keywords

    Granger causality; Graduates; Productivity; Tertiary education.;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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