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Measurement Error in Education and Growth Regressions

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Author Info

  • Portela, Miguel

    ()
    (University of Minho)

  • Alessie, Rob

    ()
    (Utrecht University)

  • Teulings, Coen

    ()
    (University of Cambridge)

Abstract

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 firstdifferences.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1165.

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Length: 25 pages
Date of creation: May 2004
Date of revision:
Publication status: published in: Scandinavian Journal of Economics, 2010, 112(3), 618-639
Handle: RePEc:iza:izadps:dp1165

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Keywords: education; measurement error; growth;

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References

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Citations

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Cited by:
  1. Coen Teuling & Thijs van Rens, 2001. "Education, growth and income inequality," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 942, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2006.
  2. Christian Morrisson & Fabrice Murtin, 2009. "The century of education," PSE Working Papers, HAL halshs-00586751, HAL.
  3. 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.
  4. Sunde, Uwe & Vischer, Thomas, 2011. "Human Capital and Growth: Specification Matters," IZA Discussion Papers 5991, Institute for the Study of Labor (IZA).
  5. 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.
  6. Mazhar MUGHAL & Natalia VECHIU, 2010. "The role of Foreign Direct Investment in higher education in the developing countries (Does FDI promote education?)," Working Papers, CATT - UPPA - Université de Pau et des Pays de l'Adour 2010-2011_10, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2010.
  7. Bas van Leeuwen & Peter Földvari, 2011. "Capital accumulation and growth in Central Europe, 1920-2006," Working Papers, Utrecht University, Centre for Global Economic History 0023, Utrecht University, Centre for Global Economic History.
  8. Bergheim, Stefan, 2007. "Pair-wise cointegration in long-run growth models," Research Notes, Deutsche Bank Research 24, Deutsche Bank Research.
  9. repec:hal:wpaper:halshs-00586751 is not listed on IDEAS
  10. 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.
  11. 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).

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