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Ideas and Education: Level or Growth Effects?

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Author Info
Steve Dowrick

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Abstract

This paper examines theory and evidence from recent studies into the contributions to economic growth of expenditure on education and on research and development. Investment in human capital has fundamentally different economic attributes to physical investment - exhibiting complementarity, positive feedback and non-rivalry - implying the potential to enhance economic growth over a long time period. In the case of education, there are debates over whether changes in educational attainment ultimately affect the long-run growth rate of the economy, or only the long-run level of output. The macroeconomic evidence on level effects is consistent with microeconomic estimates of private rates of return to schooling. It appears, however, that there are also significant long-term growth effects the more educated is the workforce, the better is it able to implement technological advances. There is consistent evidence of high social rates of return on research and development in both commercial areas of research and in more fundamental research, implying that R&D is under-resourced. A number of studies have emphasised the importance of international technology spillovers, particularly for smaller economies such as Australia.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9709.

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Date of creation: May 2003
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Handle: RePEc:nbr:nberwo:9709

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O0 - Economic Development, Technological Change, and Growth - - General
O3 - Economic Development, Technological Change, and Growth - - Technological Change

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Full references

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. Eliana Baici & Giorgia Casalone, 2005. "Has human capital accounted for regional economic growth in Italy? A panel analysis on the 1980-2001 period," ERSA conference papers ersa05p251, European Regional Science Association. [Downloadable!]
    Other versions:
  2. Massimiliano Tani, 2005. "Head-content or Headcount? Temporary Labour Movements as a Source of Growth," Economics Working Papers ECO2005/17, European University Institute. [Downloadable!]
  3. David. C. Maré, 2004. "Ideas for Growth?," Development and Comp Systems 0404007, EconWPA. [Downloadable!]
    Other versions:
  4. Sid Durbin, 2004. "Review of Workplace Skills, Technology Adoption and Firm Productivity: A Review," Treasury Working Paper Series 04/16, New Zealand Treasury. [Downloadable!]
  5. Verbic, Miroslav & Majcen, Boris & Cok, Mitja, 2009. "Education and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth," MPRA Paper 17817, University Library of Munich, Germany. [Downloadable!]
  6. Massimiliano Tani, 2006. "Head-content or Headcount? Short-term Skilled Labour Movements as a Source of Growth," IZA Discussion Papers 1934, Institute for the Study of Labor (IZA). [Downloadable!]
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