International trade and the accumulation of human capital
AbstractChanges in the terms of trade affect both the incentives and the ability of individuals to purchase education in a credit-constrained economy. A model is developed that shows how individual decision-making is affected in a small economy when it opens up to trade. Empirical results indicate that credit constraints are an important factor influencing school enrollment rates, particularly in low income countries. As a result, countries with low human capital stocks tend to increase their accumulation of human capital with increased trade. The response in high income countries is more muted.
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Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 95-49.
Date of creation: 1995
Date of revision:
Other versions of this item:
- Ann L. Owen, 1999. "International Trade and the Accumulation of Human Capital," Southern Economic Journal, Southern Economic Association, vol. 66(1), pages 61-81, July.
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