IDEAS home Printed from https://ideas.repec.org/a/bla/econom/v82y2015i326p368-390.html
   My bibliography  Save this article

Human Capital and Growth: Specification Matters

Author

Listed:
  • Uwe Sunde
  • Thomas Vischer

Abstract

type="main" xml:id="ecca12116-abs-0001"> This paper suggests that the weak empirical effect of human capital on growth in existing cross-country studies is partly the result of an inappropriate specification that does not account for the different channels through which human capital affects growth. A systematic replication of earlier results from the literature shows that both initial levels and changes in human capital have positive growth effects, while in isolation each channel often appears insignificant. The results suggest that the effect of human capital is likely to be underestimated in empirical specifications that do not account for both channels.

Suggested Citation

  • Uwe Sunde & Thomas Vischer, 2015. "Human Capital and Growth: Specification Matters," Economica, London School of Economics and Political Science, vol. 82(326), pages 368-390, April.
    • Handle: RePEc:bla:econom:v:82:y:2015:i:326:p:368-390
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/ecca.2015.82.issue-326
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Andrés Erosa & Tatyana Koreshkova & Diego Restuccia, 2010. "How Important Is Human Capital? A Quantitative Theory Assessment of World Income Inequality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1421-1449.
    2. Caselli, Francesco, 2005. "Accounting for Cross-Country Income Differences," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 9, pages 679-741, Elsevier.
    3. Christian Morrisson & Fabrice Murtin, 2009. "The Century of Education," Journal of Human Capital, University of Chicago Press, vol. 3(1), pages 1-42.
    4. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    5. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    6. Angel de la Fuente & Rafael Doménech, 2006. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 1-36, March.
    7. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    8. Miguel Portela & Rob Alessie & Coen Teulings, 2010. "Measurement Error in Education and Growth Regressions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(3), pages 618-639, September.
    9. Topel, Robert, 1999. "Labor markets and economic growth," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 44, pages 2943-2984, Elsevier.
    10. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
    11. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    12. Altinok, Nadir & Murseli, Hatidje, 2007. "International database on human capital quality," Economics Letters, Elsevier, vol. 96(2), pages 237-244, August.
    13. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
    14. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    15. Philippe Aghion & Peter Howitt & Fabrice Murtin, 2011. "The Relationship Between Health and Growth: When Lucas Meets Nelson-Phelps," Review of Economics and Institutions, Università di Perugia, vol. 2(1).
    16. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    17. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    18. Jérôme Vandenbussche & Philippe Aghion & Costas Meghir, 2006. "Growth, distance to frontier and composition of human capital," Journal of Economic Growth, Springer, vol. 11(2), pages 97-127, June.
    19. Temple, Jonathan, 1999. "A positive effect of human capital on growth," Economics Letters, Elsevier, vol. 65(1), pages 131-134, October.
    20. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    21. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    22. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
    23. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
    24. Wolfgang Lutz & Anne Goujon & Samir K.C. & Warren Sanderson, 2007. "Reconstruction of population by age, sex and level of educational attainment of 120 countries for 1970-2000," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 5(1), pages 193-235.
    25. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael S. Delgado & Daniel J. Henderson & Christopher F. Parmeter, 2014. "Does Education Matter for Economic Growth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(3), pages 334-359, June.
    2. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    3. Lenkei, Balint & Mustafa, Ghulam & Vecchi, Michela, 2018. "Growth in emerging economies: Is there a role for education?," Economic Modelling, Elsevier, vol. 73(C), pages 240-253.
    4. Md. Rabiul Islam & James B. Ang & Jakob B. Madsen, 2014. "Quality-Adjusted Human Capital And Productivity Growth," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 757-777, April.
    5. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    6. Antonin Bergeaud & Gilbert Cette & Rémy Lecat, 2018. "The role of production factor quality and technology diffusion in twentieth-century productivity growth," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 12(1), pages 61-97, January.
    7. Jérôme Vandenbussche & Philippe Aghion & Costas Meghir, 2006. "Growth, distance to frontier and composition of human capital," Journal of Economic Growth, Springer, vol. 11(2), pages 97-127, June.
    8. Marcelo Soto, 2006. "The Causal Effect of Education on Aggregate Income," Working Papers 0605, International Economics Institute, University of Valencia.
    9. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    10. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
    11. Antonio Ciccone & Elias Papaioannou, 2009. "Human Capital, the Structure of Production, and Growth," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 66-82, February.
    12. Nicola Gennaioli & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2013. "Human Capital and Regional Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(1), pages 105-164.
    13. Serge Coulombe & Jean-Francois Tremblay, 2009. "Education, Productivity and Economic Growth: A Selective Review of the Evidence," International Productivity Monitor, Centre for the Study of Living Standards, vol. 18, pages 3-24, Spring.
    14. Ulaşan, Bülent, 2012. "Cross-country growth empirics and model uncertainty: An overview," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-69.
    15. Zahra Sheidaei & Mohammadnabi Shahiki Tash, 2014. "The Cumulative Effect of Human Capital on Economic Growth: Using Panel Data Method," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 17(52), pages 95-115, June.
    16. Jesús Crespo Cuaresma & Wolfgang Lutz & Warren Sanderson, 2014. "Is the Demographic Dividend an Education Dividend?," Demography, Springer;Population Association of America (PAA), vol. 51(1), pages 299-315, February.
    17. Altinok, Nadir & Aydemir, Abdurrahman, 2017. "Does one size fit all? The impact of cognitive skills on economic growth," Journal of Macroeconomics, Elsevier, vol. 53(C), pages 176-190.
    18. Daren, Conrad, 2007. "Education and Economic Growth: Is There a Link?," MPRA Paper 18176, University Library of Munich, Germany, revised 2009.
    19. Caselli, Francesco & Ciccone, Antonio, 2013. "The contribution of schooling in development accounting: Results from a nonparametric upper bound," Journal of Development Economics, Elsevier, vol. 104(C), pages 199-211.
    20. Rudolf Kubík, 2015. "What is the Real Effect of Schooling on Economic Growth?," Prague Economic Papers, Prague University of Economics and Business, vol. 2015(2), pages 125-135.

    More about this item

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:82:y:2015:i:326:p:368-390. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.