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The contribution of schooling in development accounting: Results from a nonparametric upper bound

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  • Francesco Caselli
  • Antonio Ciccone

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Abstract

How much would output increase if underdeveloped economies were to increase their levels of schooling? We contribute to the development accounting literature by describing a non-parametric upper bound on the increase in output that can be generated by more schooling. The advantage of our approach is that the upper bound is valid for any number of schooling levels with arbitrary patterns of substitution/complementarity. Another advantage is that the upper bound is robust to certain forms of endogenous technology response to changes in schooling. We also quantify the upper bound for all economies with the necessary data, compare our results with the standard development accounting approach, and provide an update on the results using the standard approach for a large sample of countries.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1297.

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Date of creation: Nov 2011
Date of revision: Sep 2012
Handle: RePEc:upf:upfgen:1297

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Keywords: development accounting; imperfect substitution;

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Cited by:
  1. Francesco Caselli, 2014. "The Latin American Efficiency Gap," CEP Discussion Papers dp1289, Centre for Economic Performance, LSE.

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