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Measurement Error in Education and Growth Regressions

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  • 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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Citations

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Cited by:
  1. 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.
  2. Mazhar MUGHAL & Natalia VECHIU, 2010. "The role of Foreign Direct Investment in higher education in the developing countries (Does FDI promote education?)," Working Papers 2010-2011_10, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2010.
  3. repec:hal:wpaper:halshs-00586751 is not listed on IDEAS
  4. Christian Morrisson & Fabrice Murtin, 2009. "The Century of Education," Journal of Human Capital, University of Chicago Press, University of Chicago Press, vol. 3(1), pages 1-42.
  5. Tiago Sequeira & Elsa Martins, 2008. "Education public financing and economic growth: an endogenous growth model versus evidence," Empirical Economics, Springer, Springer, vol. 35(2), pages 361-377, September.
  6. Sunde, Uwe & Vischer, Thomas, 2011. "Human Capital and Growth: Specification Matters," Economics Working Paper Series 1131, University of St. Gallen, School of Economics and Political Science.
  7. Michael S. Delgado & Daniel J. Henderson & Christopher F. Parmeter, 2011. "Does Education Matter for Economic Growth?," Working Papers, University of Miami, Department of Economics 2011-13, University of Miami, Department of Economics.
  8. 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), Universidade da Beira Interior, Departamento de Gestão e Economia (Portugal) e01/2008, Universidade da Beira Interior, Departamento de Gestão e Economia (Portugal).
  9. Bergheim, Stefan, 2007. "Pair-wise cointegration in long-run growth models," Research Notes 24, Deutsche Bank Research.
  10. Bas van Leeuwen & Peter Földvári, 2013. "Capital Accumulation and Growth in Central Europe, 1920-2006," Eastern European Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 51(5), pages 69-93, September.
  11. 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, Ifo Institute for Economic Research at the University of Munich, number 41, October.

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