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Endogenous Growth, Human Capital, and Industry Wages

  • Winter-Ebmer, Rudolf

Lucas' model (1988) of external effects of human capital formation is taken as a starting point for looking at the impact of human capital on wages. Even though most empirical tests of New Growth Theory are made using time-series and cross-sections of countries--with good reasons--I suggest a microeconometric approach in order to test Lucas' basic assumption of external effects of human capital. As a first step, internal effects of education are filtered out by using wage functions for individuals in Austria. In the second step, resulting industry wage premiums are regressed on industry-specific characteristics and, above all, on average human capital in the industry to account for external effects of human capital. Copyright 1994 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

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Article provided by Wiley Blackwell in its journal Bulletin of Economic Research.

Volume (Year): 46 (1994)
Issue (Month): 4 (October)
Pages: 289-314

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Handle: RePEc:bla:buecrs:v:46:y:1994:i:4:p:289-314
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