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Human Capital and Macroeconomic Growth: Austria and Germany 1960-1997. An Update

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  • Marin, Dalia
  • Koman, Reinhard

Abstract

In an influential paper Mankiw, Romer, and Weil (1992) argue that the evidence on the international disparity in levels of per capita income and rates of growth is consistent with a standard Solow model, once it has been augmented to include human capital as an accumulable factor. In a study on Austria and Germany we augment the Solow model to allow for the accumulation of human capital. Based on a perpetual inventory estimation procedure we construct an aggregate measure of the stock of human capital of Austria and Germany by weighting workers of different schooling levels with their respective wage income. We obtain an estimate of the wage income of workers with different schooling from a Mincer type wage equation which quantifies how wages change with years of schooling. We find that the time series evidence on Austria and Germany is not consistent with a human capital augmented Solow model. Factor accumulation (broadly defined to include human capital) appears to be less (and not more) able to account for the cross-country growth performance of Austria and Germany when human capital accumulation is included in the analysis. Our results indicate that differences in technology are a driving factor in understanding cross country growth between these two neighboring countries with similar political and institutional background.

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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 569.

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Date of creation: Apr 2005
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Handle: RePEc:lmu:muenec:569

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Keywords: Economic growth; total factor productivity; human capital; technical change; growth accounting;

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  1. Ben-David, Dan, 1993. "Equalizing Exchange: Trade Liberalization and Income Convergence," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 653-79, August.
  2. Marin, Dalia, 1995. "Learning and Dynamic Comparative Advantage: Lessons from Austria's Post-war Pattern of Growth for Eastern Europe," CEPR Discussion Papers 1116, C.E.P.R. Discussion Papers.
  3. Dani Rodrik, 1997. "TFPG Controversies, Institutions, and Economic Performance in East Asia," NBER Working Papers 5914, National Bureau of Economic Research, Inc.
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Cited by:
  1. Simeonova-Ganeva, Ralitsa, 2006. "Влияние На Човешкия Капитал Върху Икономическия Растеж (България, 1949-2005 Г.)
    [The Impact of Human Capital on the Economic Growth (Bulgari
    ," MPRA Paper 37244, University Library of Munich, Germany.
  2. Ralitsa Simeonova-Ganeva & Nataliya Panayotova, 2009. "Човешки Капитал, Водещ Човешки Капитал И Доходи От Труд: Как Образованието Определя Дохода От Труд В Икономик," Working paper series 32009bg, Agency for Economic Analysis and Forecasting.

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