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Quality and Quantity of Education in the Process of Development

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  • Ana Hidalgo

    (Universidad Carlos III)

  • Amparo Castelló-Climent

    (Universidad de Valencia)

Abstract

We develop a theory of educational quality to study how quality could account for schooling decisions regarding higher education (secondary and above), and how the distribution of educational attainment and educational quality differ with the level of development. In a general equilibrium closed economy, higher education requires an extra investment of private resources, whereas primary education does not. The theory states that human capital accumulation depends on quality through two channels. The extensive channel refers to access to higher education. Even with perfect capital markets, relatively low quality could discourage opportunities to pursue education beyond primary school, since low quality decreases the returns from higher education. As a result, agents could get stuck at primary levels, and the economy ends up being poor. The intensive channel establishes that once individuals decide to participate in higher schooling, the higher the quality of educational system, the larger the investment made by each agent. Using cross-country data, empirical evidence shows that the proposed channels seem to be quantitatively important. Furthermore, the quality of education proves to be an important determinant of economic growth, especially when the quality of education is relatively high. We also find that when quality and quantity are included as potential determinants of growth rates in real per capita GDP, both variables are statistically significant in developed countries, but in the top income economies our results show a predominant effect of quality over quantity of schooling.

Suggested Citation

  • Ana Hidalgo & Amparo Castelló-Climent, 2010. "Quality and Quantity of Education in the Process of Development," 2010 Meeting Papers 238, Society for Economic Dynamics.
  • Handle: RePEc:red:sed010:238
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    3. Boucekkine, R. & Martínez, B. & Ruiz-Tamarit, J.R., 2013. "Growth vs. level effect of population change on economic development: An inspection into human-capital-related mechanisms," Journal of Mathematical Economics, Elsevier, vol. 49(4), pages 312-334.

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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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