Levels of education, growth and policy complementarities
AbstractHuman capital acquired in the formal education sector is essential for knowledge creation and dissemination but the theoretical and empirical growth literature identifies other major determinants of innovation and imitation activities (R&D, international trade and FDI). This paper is an empirical investigation in a panel data framework of the effects of education and its sub-categories on economic growth emphasizing its complementarity with the other major determinants of technological change and growth. For this purpose we focus on a sample of OECD countries during the last decades of the twentieth century and use an extended and augmented version of the Benhabib and Spiegel (1994) growth specification that considers the role of education in innovation and imitation activities and that interacts education with the other major determinants of technological change. The results reveal the importance of education for growth through technology diffusion and domestic innovation activities. To fully exploit the benefits from R&D expenses in terms of growth the average OECD country needs a sufficient level of secondary and tertiary education and to benefit from the technology incorporated in imports of machinery countries need a sufficient level of overall education.
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Bibliographic InfoPaper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2007-02.
Length: 33 pages
Date of creation: 2007
Date of revision:
education; innovation; technological diffusion; panel data;
Find related papers by JEL classification:
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-20 (All new papers)
- NEP-CSE-2007-10-20 (Economics of Strategic Management)
- NEP-EDU-2007-10-20 (Education)
- NEP-HRM-2007-10-20 (Human Capital & Human Resource Management)
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