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Globalization, Literacy Levels, and Economic Development

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Bhargava, Alok

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Abstract

This paper estimated models for GDP growth rates, poverty levels, and inequality measures for the period 1990?2000 using data on 54 developing countries at five-yearly intervals. Issues of globalization were investigated by analysing the differential effects of the countries? exports and imports and by postulating trans-logarithmic models that allow for non-linear effects of literacy levels and measures of openness. The main findings were that literacy rates affected growth rates in a quadratic manner and countries with higher literacy were more likely to benefit from globalization. Second, the model for growth rates showed non-linear and differential effects of the export/GDP and import/GDP ratios. Third, the models indicated that population health indicators such as life expectancy were important predictors of GDP growth rates. Fourth, models for poverty measures showed that poverty was not directly affected by globalization indicators. Finally, the model for Gini coefficients indicated significant effects of ?medium? and ?high? skilled labour work force, with higher proportions of high-skilled labour implying greater inequality.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number RP2008/04.

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Length: 18 pages
Date of creation: 2008
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Handle: RePEc:unu:wpaper:rp2008-04

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Related research
Keywords: globalization; economic development; education; endogeneity; inequality; poverty; non-linearities; trade;

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  1. L Alan Winters, 2004. "Trade Liberalisation and Economic Performance: An Overview," Economic Journal, Royal Economic Society, vol. 114(493), pages F4-F21, 02. [Downloadable!] (restricted)
  2. Amelia Santos-Paulino & A. P. Thirlwall, 2004. "The impact of trade liberalisation on exports, imports and the balance of payments of developing countries," Economic Journal, Royal Economic Society, vol. 114(493), pages F50-F72, 02. [Downloadable!] (restricted)
  3. Hendry, David F. & Pagan, Adrian R. & Sargan, J.Denis, 1984. "Dynamic specification," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 18, pages 1023-1100 Elsevier. [Downloadable!] (restricted)
  4. Kim Jong-Il & Lau Lawrence J., 1994. "The Sources of Economic Growth of the East Asian Newly Industrialized Countries," Journal of the Japanese and International Economies, Elsevier, vol. 8(3), pages 235-271, September. [Downloadable!] (restricted)
  5. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February. [Downloadable!] (restricted)
  6. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence," NBER Working Papers 7081, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Alok Bhargava, 2001. "Stochastic specification and the international GDP series," Econometrics Journal, Royal Economic Society, vol. 4(2), pages 7.
  8. Bhargava, Alok & Jamison, Dean T. & Lau, Lawrence J. & Murray, Christopher J. L., 2001. "Modeling the effects of health on economic growth," Journal of Health Economics, Elsevier, vol. 20(3), pages 423-440, May. [Downloadable!] (restricted)
  9. Bhargava, Alok & Sargan, J D, 1983. "Estimating Dynamic Random Effects Models from Panel Data Covering Short Time Periods," Econometrica, Econometric Society, vol. 51(6), pages 1635-59, November. [Downloadable!] (restricted)
  10. Bhargava, Alok, 1991. "Identification and Panel Data Models with Endogenous Regressors," Review of Economic Studies, Blackwell Publishing, vol. 58(1), pages 129-40, January. [Downloadable!] (restricted)
  11. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages F22-F49, 02. [Downloadable!] (restricted)
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