Education, Growth, and Income Inequality
Abstract
Estimates of the effect of education on GDP (the social return) have been hard to reconcile with micro evidence on the private return to schooling. We present a simple explanation combining two ideas: imperfect substitution and endogenous skill-biased technological progress and use cross-country panel data on inequality and GDP to test these ideas. A one-year increase in the level of education reduces the private return by 2 percentage points, consistent with Katz-Murphy's (1992) elasticity of substitution. We find no evidence for reversal of this initial effect as in Acemoglu (2002). In the short run, the social return equals the private return. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.Download Info
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Bibliographic Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.
Volume (Year): 90 (2008)
Issue (Month): 1 (February)
Pages: 89-104
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Related research
Keywords:Other versions of this item:
- Coen Teuling & Thijs van Rens, 2001. "Education, growth and income inequality," Economics Working Papers 942, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2006.
- Thijs van Rens, 2002. "Education, Growth and Income Inequality," CESifo Working Paper Series 653, CESifo Group Munich.
- Teulings, Coen N & van Rens, Thijs, 2003. "Education, Growth and Income Inequality," CEPR Discussion Papers 3863, C.E.P.R. Discussion Papers.
- E20 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Alessie, Rob & Portela, Miguel & Teulings, Coen N, 2004.
"Measurement Error in Education and Growth Regressions,"
CEPR Discussion Papers
4637, C.E.P.R. Discussion Papers.
- Miguel Portela & Rob Alessie & Coen Teulings, 2010. "Measurement Error in Education and Growth Regressions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(3), pages 618-639, 09.
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