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The Evolution of Education: A Macroeconomic Analysis

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  • Diego Restuccia
  • Guillaume Vandenbroucke

Abstract

Between 1940 and 2000 there has been a substantial increase of educational attainment in the United States. What caused this trend? We develop a model of schooling decisions in order to assess the quantitative contribution of technological progress in explaining the evolution of education. We use earnings across educational groups and growth in gross domestic product per worker to restrict technological progress. These restrictions imply substantial skill-biased technical change (SBTC). We find that changes in relative earnings through SBTC can explain the bulk of the increase in educational attainment. In particular, a calibrated version of the model generates an increase in average years of schooling of 48 percent compared to 27 percent in the data. This strong effect of changes in relative earnings on educational attainment is robust to relevant variations in the model and is consistent with empirical estimates of the long-run income elasticity of schooling. We also find that the substantial increase in life expectancy observed during the period contributes little to the change in educational attainment in the model.

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  • Diego Restuccia & Guillaume Vandenbroucke, 2008. "The Evolution of Education: A Macroeconomic Analysis," Working Papers tecipa-339, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-339
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    1. Is skill-biased technological change driving education improvements?
      by Economic Logician in Economic Logic on 2008-10-15 19:06:00

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    Cited by:

    1. Diego Restuccia & Guillaume Vandenbroucke, 2013. "The Evolution Of Education: A Macroeconomic Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(3), pages 915-936, August.
    2. Diego Restuccia & Guillaume Vandenbroucke, 2014. "Explaining Educational Attainment across Countries and over Time," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(4), pages 824-841, October.
    3. Jeremy Greenwood & Nezih Guner & Georgi Kocharkov & Cezar Santos, 2016. "Technology and the Changing Family: A Unified Model of Marriage, Divorce, Educational Attainment, and Married Female Labor-Force Participation," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(1), pages 1-41, January.
    4. Diego Restuccia & Guillaume Vandenbroucke, 2012. "A Century of Human Capital and Hours," Working Papers tecipa-450, University of Toronto, Department of Economics.
    5. Gonzalo Castex, 2010. "Accounting for Changes in College Attendance Profile: a Quantitative Life-Cycle Analysis," Working Papers Central Bank of Chile 598, Central Bank of Chile.
    6. John Bailey Jones & Fang Yang, 2016. "Skill-Biased Technical Change and the Cost of Higher Education," Journal of Labor Economics, University of Chicago Press, vol. 34(3), pages 621-662.
    7. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    8. He, Hui, 2012. "What drives the skill premium: Technological change or demographic variation?," European Economic Review, Elsevier, vol. 56(8), pages 1546-1572.
    9. Diego Restuccia & Guillaume Vandenbroucke, 2014. "Explaining Educational Attainment across Countries and over Time," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(4), pages 824-841, October.
    10. Delalibera, Bruno Ricardo & Ferreira, Pedro Cavalcanti, 2019. "Early childhood education and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 98(C), pages 82-104.
    11. Christopher Herrington, 2015. "Public Education Financing, Earnings Inequality, and Intergenerational Mobility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(4), pages 822-842, October.
    12. Masashi Tanaka, 2013. "Human Capital Investment, Credentialing, and Wage Differentials," Discussion Papers in Economics and Business 13-31-Rev., Osaka University, Graduate School of Economics, revised Aug 2017.
    13. Youngmin Park, 2018. "Inequality in Parental Transfers, Borrowing Constraints, and Optimal Higher Education Subsidies," 2018 Meeting Papers 623, Society for Economic Dynamics.
    14. Daniele Coen-Pirani & Rui Castro, 2010. "Public Policy, Technological Change, and the Evolution of Educational Attainment," 2010 Meeting Papers 754, Society for Economic Dynamics.
    15. Anurag Banerjee & Parantap Basu & Elisa Keller, 2016. "Business Cost and Skill Acquisition," CEGAP Working Papers 2016_01, Durham University Business School.
    16. Lutz Hendricks, 2010. "Cross-country variation in educational attainment: structural change or within-industry skill upgrading?," Journal of Economic Growth, Springer, vol. 15(3), pages 205-233, September.
    17. Ferreira, Pedro Cavalcanti & Delalibera, Bruno Ricardo, 2016. "Economic growth and complementarity between stages of human capital," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 779, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    18. Hui He, 2011. "Why Have Girls Gone to College? A Quantitative Examination of the Female College Enrollment Rate in the United States: 1955-1980," Annals of Economics and Finance, Society for AEF, vol. 12(1), pages 41-64, May.
    19. Jeremy Greenwood, 2011. "Technology And The Changing Family," 2011 Meeting Papers 1420, Society for Economic Dynamics.
    20. Daniel Gallardo‐Albarrán & Robert Inklaar, 2021. "The Role Of Capital And Productivity In Accounting For Income Differences Since 1913," Journal of Economic Surveys, Wiley Blackwell, vol. 35(3), pages 952-974, July.
    21. Cha’Ngom, Narcisse & Deuster, Christoph & Docquier, Frédéric & Machado, Joël, 2023. "Selective Migration and Economic Development: A Generalized Approach," IZA Discussion Papers 16222, Institute of Labor Economics (IZA).
    22. Todd Schoellman & Lutz Hendricks, 2009. "Student Abilities During the Expansion of U.S. Education, 1950-2000," 2009 Meeting Papers 162, Society for Economic Dynamics.
    23. Burzyński, Michał & Docquier, Frédéric & Scheewel, Hendrik, 2021. "The geography of climate migration," Journal of Demographic Economics, Cambridge University Press, vol. 87(3), pages 345-381, September.
    24. Christopher Herrington, 2013. "Public Education Financing Systems, Earnings Inequality, and Intergenerational Mobility," 2013 Meeting Papers 1233, Society for Economic Dynamics.

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    More about this item

    Keywords

    educational attainment; schooling; skill-biased technical progress; human capital;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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