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Measurement Error in Education and Growth Regressions

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Author Info

  • Miguel Portela

    ()
    (Minho University)

  • Rob Alessie

    ()
    (Utrecht University,Utrecht School of Economics)

  • Coen N. Teulings

    ()

Abstract

Published in The Scandinavian Journal of Economics" , 112(3), 618-39. The perpetual inventory method used for the construction of education data per country leads to systematic measurement error. This paper analyses the effect of this measurement error on GDP regressions. There is a systematic difference in the education level between census data and observations constructed from enrolment data. We discuss a methodology for correcting the measurement error. The standard attenuation bias suggests that using these corrected data would lead to a higher coefficient. Our regressions reveal the opposite. We discuss why the measurement error yields an overestimation. Our analysis contributes to an explanation of the difference between regressions based on 5 and on 10 year first-differences.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-040/3.

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Date of creation: 13 Apr 2004
Date of revision: 24 Nov 2005
Handle: RePEc:dgr:uvatin:20040040

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Web page: http://www.tinbergen.nl

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Keywords: growth; education; measurement error;

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References

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  1. 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.
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Citations

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Cited by:
  1. Joachim Ragnitz & Stefan Eichler & Beate Grundig & Harald Lehmann & Carsten Pohl & Lutz Schneider & Helmut Seitz & Marcel Thum, 2007. "Die demographische Entwicklung in Ostdeutschland : Gutachten im Auftrag des Bundesministeriums für Wirtschaft und Technologie," ifo Dresden Studien, Ifo Institute for Economic Research at the University of Munich, number 41.
  2. Bas van Leeuwen & Peter Földvari, 2011. "Capital accumulation and growth in Central Europe, 1920-2006," Working Papers 0023, Utrecht University, Centre for Global Economic History.
  3. Coen Teulings & Thijs van Rens, 2008. "Education, Growth, and Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 89-104, February.
  4. Christian Morrison & Fabrice Murtin, 2009. "The century of education," LSE Research Online Documents on Economics 51583, London School of Economics and Political Science, LSE Library.
  5. Christian Morrisson & Fabrice Murtin, 2009. "The Century of Education," CEP Discussion Papers dp0934, Centre for Economic Performance, LSE.
  6. Sunde, Uwe & Vischer, Thomas, 2011. "Human Capital and Growth: Specification Matters," IZA Discussion Papers 5991, Institute for the Study of Labor (IZA).
  7. Tiago Neves Sequeira & Nuno Ferraz, 2008. "Is Education prejudiced by Country-Risk? A Panel-Data Study using Attainment Data and Country-Risk as a Rational Expectation," Working Papers de Gestão, Economia e Marketing (Management, Economics and Marketing Working Papers) e01/2008, Universidade da Beira Interior, Departamento de Gestão e Economia (Portugal).
  8. repec:hal:wpaper:halshs-00586751 is not listed on IDEAS
  9. Bergheim, Stefan, 2007. "Pair-wise cointegration in long-run growth models," Research Notes 24, Deutsche Bank Research.
  10. Delgado, Michael S. & Henderson, Daniel J. & Parmeter, Christopher F., 2012. "Does Education Matter for Economic Growth?," IZA Discussion Papers 7089, Institute for the Study of Labor (IZA).
  11. Tiago Sequeira & Elsa Martins, 2008. "Education public financing and economic growth: an endogenous growth model versus evidence," Empirical Economics, Springer, vol. 35(2), pages 361-377, September.

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