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Human capital, aggregation, and growth

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  • GROWIEC, Jakub

Abstract

The famous Mincer equation regressing log earnings on years of schooling is derived from a linear human capital accumulation equation at the individual level. Even if the cross-sectional Mincer equation holds at the level of individuals, it does not hold at the macro level of countries because aggregation of human capital has to take into account its vintage structure:human capital is embodied in people of different generations whose lifespan is finite. Finiteness of people's lives imposes also a limit on the potential of human capital accumulation to drive aggregate economic growth. Aggregate human capital accumulation may however become an engine of growth thanks to human capital externalities (knowledge spillovers). We use these findings to revisit the assumptions of the well-known Uzawa-Lucas growth model from an aggregation perspective.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2007056.

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Date of creation: 01 Aug 2007
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Handle: RePEc:cor:louvco:2007056

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Keywords: human capital accumulation; Mincer equation; aggregation; vintage structure; balanced growth;

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References

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Cited by:
  1. Jakub Growiec & Christian Groth, 2012. "On aggregating human capital across heterogeneous cohorts," National Bank of Poland Working Papers 134, National Bank of Poland, Economic Institute.
  2. Growiec, Jakub, 2007. "Human Capital, Aggregation, and Growth," MPRA Paper 7070, University Library of Munich, Germany.

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