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Measurement Error in Education and Growth Regressions

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Author Info
Portela, Miguel () (Minho University, Tinbergen Institute and IZA Bonn)
Alessie, Rob (Utrecht University and Utrecht School of Economics)
Teulings, Coen (Erasmus University Rotterdam, Tinbergen Institute and IZA Bonn)

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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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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
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Handle: RePEc:iza:izadps:dp1165

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Related research
Keywords: growth education measurement error

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Find related papers by JEL classification:
I2 - Health, Education, and Welfare - - Education
O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Coen Teuling & Thijs van Rens, 2001. "Education, Growth and Income Inequality," Economics Working Papers 942, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2006. [Downloadable!]
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