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Micro Evidence on Human Capital as the Engine of Growth

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  • Trostel, P.A.
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    Abstract

    This study examines a crucial assumption in much of the recent work on endogenous growth, namely, constant returns to scale in the production of human capital. A simple model is constructed to show that the returns to scale in human capital production can be inferred from the relationship between the wage rate and years of schooling. A large international micro dataset is used to estimate this relationship. The empirical evidence is decisive. There are decreasing returns to scale in human capital production; that is, the micro-level evidence is not supportive of endogenous growth driven by human capital accumulation.

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    File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp555.pdf
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    Bibliographic Info

    Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 555.

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    Length: 20 pages
    Date of creation: 2000
    Date of revision:
    Handle: RePEc:wrk:warwec:555

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    Web page: http://www2.warwick.ac.uk/fac/soc/economics/
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    Related research

    Keywords: GROWTH RATE ; PRODUCTION ; HUMAN CAPITAL;

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