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Schooling and Distortions in a Vintage Capital Model

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  • Xavier Mateos-Planas

    (University of Southampton)

Abstract

This paper integrates the analysis of choices on education and on technology adoption to study international economic disparities. Two candidate explanations are considered: differences in distortions that affect the cost of technology adoption and differences in the effectivenss of schools. The implications of these two factors for differences in output per capita, educational attainment, and the age of technologies across-countries are assessed in a vintage capital model with technology-specific learning-by-doing. Predictions are obtained for a parameterized economy that matches US aggregate observations and evidence on learning. Differences in investment distortions produce plausible correlations only if the major role of education is to improve the ability to learn technologies. On the other hand, differences in school effectiveness produce plausible results only if the role of education is to provide a productive ability that is independent of learning. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1006/redy.2000.0104
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 4 (2001)
Issue (Month): 1 (January)
Pages: 127-158

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Handle: RePEc:red:issued:v:4:y:2001:i:1:p:127-158

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Cited by:
  1. Caselli, Francesco, 2004. "Accounting for Cross-Country Income Differences," CEPR Discussion Papers 4703, C.E.P.R. Discussion Papers.
  2. Pedro Cavalcanti Ferreira & Samuel de Abreu Pessoa, 2007. "The Effects of Longevity and Distortions on Education and Retirement," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 472-493, July.
  3. Pessoa, Samuel de Abreu & Rob, Rafael, 2002. "Vintage Capital, Distortions and Development," Economics Working Papers (Ensaios Economicos da EPGE) 447, Graduate School of Economics, Getulio Vargas Foundation (Brazil).
  4. Mateos-Planas, Xavier, 2004. "Technology adoption with finite horizons," Journal of Economic Dynamics and Control, Elsevier, vol. 28(11), pages 2129-2154, October.
  5. Ferreira, Pedro Cavalcanti Gomes & Pessoa, Samuel de Abreu, 2003. "The Costs of Education, Longevity and the Poverty of Nations," Economics Working Papers (Ensaios Economicos da EPGE) 472, Graduate School of Economics, Getulio Vargas Foundation (Brazil).
  6. Huseyin cagri SAGLAM, 2002. "Optimal pattern of technology adoption under embodiment with a finite planning horizon : A multi-stage optimal control approach," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2002031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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