Does the Diversity of Human Capital Increase GDP? A Comparison of Education Systems
Abstract
This paper examines how different education systems affect GDP by influencing the diversity of human capital. We construct an overlapping generation model in which agents are heterogeneous in income and innate ability, and the final goods are produced with differentiated intermediate goods. We analyze an economy in which an income distribution converges to a stationary distribution. It is shown that the diversity of human capital induced by income inequality always lowers the GDP of the next period, while the diversity of human capital induced by heterogeneous ability can increase GDP, if the produced intermediate goods are sufficiently substitutable and firms have a large span of control. Hence, as public education equalizes education resources across households, it mitigates the negative effect of income inequality on GDP, while the effects of ability tracking crucially depend on the production structure of the economy.Download Info
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.Bibliographic Info
Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 06-19.Length: 33 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:osk:wpaper:0619
Contact details of provider:
Email:
Web page: http://www.econ.osaka-u.ac.jp/
More information through EDIRC
Related research
Keywords: Span of control; Complementarities; Human capital; Ability tracking;Other versions of this item:
- Takii, Katsuya & Tanaka, Ryuichi, 2009. "Does the diversity of human capital increase GDP? A comparison of education systems," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 998-1007, August.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-07-09 (All new papers)
- NEP-DEV-2006-07-09 (Development)
- NEP-EDU-2006-07-09 (Education)
- NEP-HRM-2006-07-09 (Human Capital & Human Resource Management)
- NEP-PBE-2006-07-09 (Public Economics)
References
References listed on IDEASPlease 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.:
- Kremer, Michael, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 551-75, August.
- Eric A. Hanushek & John F. Kain & Jacob M. Markman & Steven G. Rivkin, 2001.
"Does Peer Ability Affect Student Achievement?,"
NBER Working Papers
8502, National Bureau of Economic Research, Inc.
- Jacob M. Markman & Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 2003. "Does peer ability affect student achievement?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(5), pages 527-544.
- Epple, Dennis & Newlon, Elizabeth & Romano, Richard, 2002.
"Ability tracking, school competition, and the distribution of educational benefits,"
Journal of Public Economics,
Elsevier, vol. 83(1), pages 1-48, January.
- Dennis Epple & Elizabeth Newlon & Richard Romano, 2000. "Ability Tracking, School Competition, and the Distribution of Educational Benefits," NBER Working Papers 7854, National Bureau of Economic Research, Inc.
- Laura M. Argys & Daniel I. Rees & Dominic J. Brewer, 1996. "Detracking America's schools: Equity at zero cost?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(4), pages 623-645.
- Barro, R.J. & Mankiw, N.G. & Sala-i-Martin, X., 1992.
"Capital Mobility in Neoclassical Models of Growth,"
Papers
655, Yale - Economic Growth Center.
- Barro, Robert J & Mankiw, N Gregory & Sala-i-Martin, Xavier, 1995. "Capital Mobility in Neoclassical Models of Growth," American Economic Review, American Economic Association, vol. 85(1), pages 103-15, March.
- Robert J. Barro & N. Gregory Mankiw & Xavier Sala-i-Martin, 1995. "Capital Mobility in Neoclassical Models of Growth," NBER Working Papers 4206, National Bureau of Economic Research, Inc.
- Robert J. Barro & N. Gregory Mankiw & Xavier Sala-i-Martin, 1994. "Capital mobility in Neoclassical models of growth," Economics Working Papers 82, Department of Economics and Business, Universitat Pompeu Fabra.
- Barro, R. & Mankiw, G., 1992. "Capital Mobility in Neoclassical Models of Growth," Harvard Institute of Economic Research Working Papers 1615, Harvard - Institute of Economic Research.
- Barro, Robert J. & Mankiw, N Gregory & Sala-i-Martin, Xavier, 1994. "Capital Mobility in Neoclassical Models of Growth," CEPR Discussion Papers 1019, C.E.P.R. Discussion Papers.
- Brunello, Giorgio & Giannini, Massimo & Ariga, Kenn, 2004. "The Optimal Timing of School Tracking," IZA Discussion Papers 995, Institute for the Study of Labor (IZA).
- Benabou, Roland, 1996. "Heterogeneity, Stratification, and Growth: Macroeconomic Implications of Community Structure and School Finance," American Economic Review, American Economic Association, vol. 86(3), pages 584-609, June.
- Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001.
"Nominal rigidities and the dynamic effects of a shock to monetary policy,"
Proceedings,
Federal Reserve Bank of San Francisco, issue Jun.
- Lawrence J. Christiano & Martin Eichenbaum & Charles L. Evans, 2005. "Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 1-45, February.
- Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001. "Nominal rigidities and the dynamic effects of a shock to monetary policy," Working Paper 0107, Federal Reserve Bank of Cleveland.
- Lawrence J. Christiano & Martin Eichenbaum & Charles L. Evans, 2001. "Nominal rigidities and the dynamic effects of a shock to monetary policy," Working Paper Series WP-01-08, Federal Reserve Bank of Chicago.
- Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001. "Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy," NBER Working Papers 8403, National Bureau of Economic Research, Inc.
- Kerwin Kofi Charles & Erik Hurst, 2003.
"The Correlation of Wealth across Generations,"
Journal of Political Economy,
University of Chicago Press, vol. 111(6), pages 1155-1182, December.
- Kerwin Kofi Charles & Erik Hurst, 2002. "The Correlation of Welath Across Generations," NBER Working Papers 9314, National Bureau of Economic Research, Inc.
- Henderson, Vernon & Mieszkowski, Peter & Sauvageau, Yvon, 1978. "Peer group effects and educational production functions," Journal of Public Economics, Elsevier, vol. 10(1), pages 97-106, August.
- Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
- Mankiw, N Gregory & Romer, David & Weil, David N, 1992.
"A Contribution to the Empirics of Economic Growth,"
The Quarterly Journal of Economics,
MIT Press, vol. 107(2), pages 407-37, May.
- N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
- Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
- Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
- Dennis Epple & Richard Romano, 2000.
"Neighborhood Schools, Choice, and the Distribution of Educational Benefits,"
NBER Working Papers
7850, National Bureau of Economic Research, Inc.
- Dennis N. Epple & Richard Romano, 2003. "Neighborhood Schools, Choice, and the Distribution of Educational Benefits," NBER Chapters, in: The Economics of School Choice, pages 227-286 National Bureau of Economic Research, Inc.
- Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-34, August.
- Brown, Giorgina & Micklewright, John & Schnepf, Sylke V. & Waldmann, Robert, 2005. "Cross-National Surveys of Learning Achievement: How Robust are the Findings?," IZA Discussion Papers 1652, Institute for the Study of Labor (IZA).
- Thomas J. Nechyba, 2003.
"Centralization, Fiscal Federalism, and Private School Attendance,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(1), pages 179-204, February.
- Nechyba, Thomas J., 2002. "Centralization, Fiscal Federalism and Privte School Attendance," Working Papers 02-11, Duke University, Department of Economics.
- Thomas J. Nechyba, 2001. "Centralization, Fiscal Federalism and Private School Attendance," NBER Working Papers 8355, National Bureau of Economic Research, Inc.
- Summers, Anita A & Wolfe, Barbara L, 1977. "Do Schools Make a Difference?," American Economic Review, American Economic Association, vol. 67(4), pages 639-52, September.
- Ron W Zimmer & Eugenia F Toma, 2000. "Peer effects in private and public schools across countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(1), pages 75-92.
- Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
- Lefgren, Lars, 2004. "Educational peer effects and the Chicago public schools," Journal of Urban Economics, Elsevier, vol. 56(2), pages 169-191, September.
- Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Katsuya Takii & Ryuichi Tanaka, 2009. "On the Role of Job Assignment in a Comparison of Education Systems," OSIPP Discussion Paper 09E005, Osaka School of International Public Policy, Osaka University.
- Matilde Bombardini & Giovanni Gallipoli & German Pupato, 2012.
"Skill Dispersion and Trade Flows,"
American Economic Review,
American Economic Association, vol. 102(5), pages 2327-48, August.
- Matilde Bombardini & Giovanni Gallipoli & Germán Pupato, 2009. "Skill Dispersion and Trade Flows," NBER Working Papers 15097, National Bureau of Economic Research, Inc.
- Matilde Bombardini & Giovanni Gallipoli & Germán Pupato, 2009. "Skill Dispersion and Trade Flows," Working Paper Series 20_09, The Rimini Centre for Economic Analysis, revised Jan 2009.
- Ryo Arawatari, 2009.
"Informatization, voter turnout and income inequality,"
Journal of Economic Inequality,
Springer, vol. 7(1), pages 29-54, March.
- Ryo Arawatari, 2007. "Informatization, Voter Turnout and Income Inequality," Discussion Papers in Economics and Business 07-28, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
- Fali HUANG & Pao-Li CHANG, 2012.
"Trade and Divergence in Education Systems,"
DEGIT Conference Papers
c017_016, DEGIT, Dynamics, Economic Growth, and International Trade.
- Pao-Li Chang & Fali Huang, 2010. "Trade and Divergence in Education Systems," Working Papers 33-2010, Singapore Management University, School of Economics.
- Pao-Li Chang & Fali Huang, 2012. "Trade and Divergence in Education Systems," Working Papers 32-2012, Singapore Management University, School of Economics.
Lists
This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.Statistics
Access and download statisticsCorrections
When requesting a correction, please mention this item's handle: RePEc:osk:wpaper:0619For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Atsuko SUZUKI).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.

