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Mass Education or a Minority Well Educated Elite in the Process of Development: the Case of India

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  • Amparo Castelló-Climent
  • Abhiroop Mukhopadhyay

Abstract

This paper analyses whether in developing countries mass education is more growth enhancing than to have a minority well educated elite. Using the Indian census data as a benchmark and enrollment rates at different levels of education we compute annual attainment levels for a panel of 16 Indian states from 1961 to 2001. Results indicate that if the reduction of illiteracy stops at the primary level of education, it is not worthwhile for growth. Instead, the findings reveal a strong and robust significant effect on growth of a greater share of population completing tertiary education. The economic impact is also found to be very large: if one percent of the adult population were to complete tertiary education instead of completing only primary, the annual growth rate could increase by about 4 percentage points. Moreover, we find that a one percentage change in tertiary education has the same effect on growth as a decrease in illiteracy by 13 percentage points. A sensitivity analysis shows the results are unlikely to be driven by omitted variables, structural breaks, reverse causation or atypical observations.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1086.

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Date of creation: Nov 2011
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Handle: RePEc:cep:cepdps:dp1086

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Distribution of education; attainment levels; economic growth; panel data;

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  1. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July.
  2. Chetan Ghate & Stephen Wright, 2008. "V-Factor: Distribution, timing and correlates of the the great Indian growth turnaround," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-03, Indian Statistical Institute, New Delhi, India.
  3. Sarah Voitchovsky, 2005. "Does the Profile of Income Inequality Matter for Economic Growth?," Journal of Economic Growth, Springer, vol. 10(3), pages 273-296, 09.
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  5. Barry Bosworth & Susan M. Collins & Arvind Virmani, 2007. "Sources of Growth in the Indian Economy," NBER Working Papers 12901, National Bureau of Economic Research, Inc.
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  7. Saint-Paul, Gilles, 1997. "The role of rents to human capital in economic development," Journal of Development Economics, Elsevier, vol. 53(2), pages 229-249, August.
  8. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
  9. Zvi Griliches & Jerry A. Hausman, 1984. "Errors in Variables in Panel Data," NBER Technical Working Papers 0037, National Bureau of Economic Research, Inc.
  10. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
  11. Kaivan Munshi & Mark Rosenzweig, 2009. "Why is Mobility in India so Low? Social Insurance, Inequality, and Growth," NBER Working Papers 14850, National Bureau of Economic Research, Inc.
  12. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
  13. Rayaprolu Nagaraj & Aristomène Varoudakis & Marie-Ange Véganzonès, 1998. "Long-Run Growth Trends and Convergence Across Indian States," OECD Development Centre Working Papers 131, OECD Publishing.
  14. Michael Kremer & Nazmul Chaudhury & F. Halsey Rogers & Karthik Muralidharan & Jeffrey Hammer, 2005. "Teacher Absence in India: A Snapshot," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 658-667, 04/05.
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