Human capital in growth regressions: how much difference does data quality make? An update and further results
AbstractWe construct estimates of educational attainment for a sample of OECD countries using previously unexploited sources. We follow a heuristic approach to obtain plausible time profiles for attainment levels by removing sharp breaks in the data that seem to reflect changes in classification criteria. We then construct indicators of the information content of our series and a number of previously available data sets and examine their performance in several growth specifications. We find a clear positive correlation between data quality and the size and significance of human capital coefficients in growth regressions. Using an extension of the classical errors in variables model, we construct a set of meta-estimates of the coefficient of years of schooling in an aggregate Cobb-Douglas production function. Our results suggest that, after correcting for measurement error bias, the value of this parameter is well above 0.50.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 537.02.
Date of creation: 25 Aug 2002
Date of revision:
human capital; growth; measurement error;
Other versions of this item:
- de la Fuente, Angel & Doménech, Rafael, 2002. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make? An Update and Further Results," CEPR Discussion Papers 3587, C.E.P.R. Discussion Papers.
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- I20 - Health, Education, and Welfare - - Education - - - General
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- C19 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-09-28 (All new papers)
- NEP-DEV-2002-09-28 (Development)
- NEP-DGE-2002-09-28 (Dynamic General Equilibrium)
- NEP-LAB-2002-09-28 (Labour Economics)
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