IDEAS home Printed from https://ideas.repec.org/a/eee/inecon/v106y2017icp165-183.html
   My bibliography  Save this article

Globalization and human capital investment: Export composition drives educational attainment

Author

Listed:
  • Blanchard, Emily J.
  • Olney, William W.

Abstract

Human capital is among the most important drivers of long-run economic growth, but its macroeconomic determinants are still not well understood. This paper demonstrates the importance of a key demand-side driver of education, using exogenously-driven changes in the composition of a country's exports as a lens to study how shifting patterns of production influence subsequent educational attainment. Using a panel of 102 countries and 45years, we find that growth in less skill-intensive exports depresses average educational attainment while growth in skill-intensive exports increases schooling. These results provide insight into which types of sectoral growth are most beneficial for long-run human capital formation and suggest that trade liberalization could exacerbate initial differences in factor endowments across countries.

Suggested Citation

  • Blanchard, Emily J. & Olney, William W., 2017. "Globalization and human capital investment: Export composition drives educational attainment," Journal of International Economics, Elsevier, vol. 106(C), pages 165-183.
  • Handle: RePEc:eee:inecon:v:106:y:2017:i:c:p:165-183
    DOI: 10.1016/j.jinteco.2017.03.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0022199617300302
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jinteco.2017.03.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. 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.
    2. Robert E. Lucas Jr., 2015. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 105(5), pages 85-88, May.
    3. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2009. "Child Labor and Schooling in A Globalizing World: Some Evidence from Urban India," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 498-507, 04-05.
    4. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 4, number 4, June.
    5. Edmonds, Eric V. & Pavcnik, Nina, 2006. "International trade and child labor: Cross-country evidence," Journal of International Economics, Elsevier, vol. 68(1), pages 115-140, January.
    6. Claustre Bajona & Timothy Kehoe, 2010. "Trade, Growth, and Convergence in a Dynamic Heckscher-Ohlin Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 487-513, July.
    7. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-978, December.
    8. David Atkin, 2016. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," American Economic Review, American Economic Association, vol. 106(8), pages 2046-2085, August.
    9. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    10. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    11. Blanchard, Emily & Willmann, Gerald, 2016. "Trade, education, and the shrinking middle class," Journal of International Economics, Elsevier, vol. 99(C), pages 263-278.
    12. Dan A. Black & Terra G. McKinnish & Seth G. Sanders, 2005. "Tight Labor Markets and the Demand for Education: Evidence from the Coal Boom and Bust," ILR Review, Cornell University, ILR School, vol. 59(1), pages 3-16, October.
    13. Eric V. Edmonds & Nina Pavcnik & Petia Topalova, 2010. "Trade Adjustment and Human Capital Investments: Evidence from Indian Tariff Reform," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 42-75, October.
    14. Jae-won Jung & Jean Mercenier, 2008. "A Simple Model of Offshore Outsourcing,Technology Upgrading and Welfare," THEMA Working Papers 2008-21, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    15. Bernard, Andrew B. & Jensen, J. Bradford, 1997. "Exporters, skill upgrading, and the wage gap," Journal of International Economics, Elsevier, vol. 42(1-2), pages 3-31, February.
    16. Hanson, Gordon H. & Lind, Nelson & Muendler, Marc-Andreas, 2015. "The Dynamics of Comparative Advantage," CAGE Online Working Paper Series 252, Competitive Advantage in the Global Economy (CAGE).
    17. Wood, Adrian & Ridao-Cano, Cristobal, 1999. "Skill, Trade, and International Inequality," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 89-119, January.
    18. Torben M Andersen, 2015. "Human Capital, Inequality and Growth," European Economy - Discussion Papers 007, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    19. Richard Baldwin & Daria Taglioni, 2006. "Gravity for Dummies and Dummies for Gravity Equations," NBER Working Papers 12516, National Bureau of Economic Research, Inc.
    20. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    21. Edmonds, Eric V., 2006. "Child labor and schooling responses to anticipated income in South Africa," Journal of Development Economics, Elsevier, vol. 81(2), pages 386-414, December.
    22. Redding, Stephen & Schott, Peter K., 2003. "Distance, skill deepening and development: will peripheral countries ever get rich?," Journal of Development Economics, Elsevier, vol. 72(2), pages 515-541, December.
    23. James Feyrer, 2019. "Trade and Income—Exploiting Time Series in Geography," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 1-35, October.
    24. Daniel C. Hickman & William W. Olney, 2011. "Globalization and Investment in Human Capital," ILR Review, Cornell University, ILR School, vol. 64(4), pages 654-672, July.
    25. Heath, Rachel & Mushfiq Mobarak, A., 2015. "Manufacturing growth and the lives of Bangladeshi women," Journal of Development Economics, Elsevier, vol. 115(C), pages 1-15.
    26. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    27. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    28. Jaume Ventura, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 57-84.
    29. Benjamin F. Jones, 2014. "The Human Capital Stock: A Generalized Approach," American Economic Review, American Economic Association, vol. 104(11), pages 3752-3777, November.
    30. Gauri Kartini Shastry, 2012. "Human Capital Response to Globalization: Education and Information Technology in India," Journal of Human Resources, University of Wisconsin Press, vol. 47(2), pages 287-330.
    31. Davidson, Carl & Sly, Nicholas, 2014. "A simple model of globalization, schooling and skill acquisition," European Economic Review, Elsevier, vol. 71(C), pages 209-227.
    32. Shushanik Hakobyan & John McLaren, 2016. "Looking for Local Labor Market Effects of NAFTA," The Review of Economics and Statistics, MIT Press, vol. 98(4), pages 728-741, October.
    33. Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
    34. 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.
    35. J. C. Herbert Emery & Ana Ferrer & David Green, 2012. "Long-Term Consequences of Natural Resource Booms for Human Capital Accumulation," ILR Review, Cornell University, ILR School, vol. 65(3), pages 708-734, July.
    36. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    37. Greenland, Andrew & Lopresti, John, 2016. "Import exposure and human capital adjustment: Evidence from the U.S," Journal of International Economics, Elsevier, vol. 100(C), pages 50-60.
    38. Oster, Emily & Steinberg, Bryce Millett, 2013. "Do IT service centers promote school enrollment? Evidence from India," Journal of Development Economics, Elsevier, vol. 104(C), pages 123-135.
    39. Foster, Andrew D & Rosenzweig, Mark R, 1996. "Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution," American Economic Review, American Economic Association, vol. 86(4), pages 931-953, September.
    40. Robert Jensen, 2012. "Do Labor Market Opportunities Affect Young Women's Work and Family Decisions? Experimental Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 127(2), pages 753-792.
    41. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc.
    42. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 3, number 3, June.
    43. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, September.
    44. Edmonds, Eric V. & Pavcnik, Nina, 2005. "The effect of trade liberalization on child labor," Journal of International Economics, Elsevier, vol. 65(2), pages 401-419, March.
    45. Zhu, Susan Chun & Trefler, Daniel, 2005. "Trade and inequality in developing countries: a general equilibrium analysis," Journal of International Economics, Elsevier, vol. 65(1), pages 21-48, January.
    46. Vogel, Jonathan, 2007. "Institutions and moral hazard in open economies," Journal of International Economics, Elsevier, vol. 71(2), pages 495-514, April.
    47. Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 1143-1179.
    48. Banerjee, Abhijit V. & Duflo, Esther, 2005. "Growth Theory through the Lens of Development Economics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 7, pages 473-552, Elsevier.
    49. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 515-548.
    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. Emily Blanchard & William W. Olney, 2013. "Globalization and Human Capital Investment: How Export Composition Drives Educational Attainment," Department of Economics Working Papers 2013-18, Department of Economics, Williams College, revised Mar 2015.
    2. Mingzhi Xu, 2020. "Globalization, the skill premium, and income distribution: the role of selection into entrepreneurship," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(3), pages 633-668, August.
    3. Li, Bingjing, 2018. "Export expansion, skill acquisition and industry specialization: evidence from china," Journal of International Economics, Elsevier, vol. 114(C), pages 346-361.
    4. Blanchard, Emily & Willmann, Gerald, 2016. "Trade, education, and the shrinking middle class," Journal of International Economics, Elsevier, vol. 99(C), pages 263-278.
    5. Faqin Lin, 2022. "Agriculture exports, child labor and youth education: Evidence from 68 developing countries," Review of International Economics, Wiley Blackwell, vol. 30(2), pages 490-513, May.
    6. Lin, Faqin & Long, Cheryl X., 2020. "The impact of globalization on youth education: Empirical evidence from China's WTO accession," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 820-839.
    7. Kammas, Pantelis & Sakalis, Argyris & Sarantides, Vassilis, 2021. "Pudding, plague and education: trade and human capital formation in an agrarian economy," LSE Research Online Documents on Economics 112206, London School of Economics and Political Science, LSE Library.
    8. Nina Pavcnik, 2017. "The Impact of Trade on Inequality in Developing Countries," NBER Working Papers 23878, National Bureau of Economic Research, Inc.
    9. Bolhuis, Marijn, 2019. "Catch-Up Growth and Inter-Industry Productivity Spillovers," MPRA Paper 94730, University Library of Munich, Germany.
    10. Greenland, Andrew & Lopresti, John, 2016. "Import exposure and human capital adjustment: Evidence from the U.S," Journal of International Economics, Elsevier, vol. 100(C), pages 50-60.
    11. Anjali Adukia & Sam Asher & Paul Novosad, 2020. "Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction," American Economic Journal: Applied Economics, American Economic Association, vol. 12(1), pages 348-376, January.
    12. Lou, Jing & Li, Jie, 2022. "Export expansion and intergenerational education mobility: Evidence from China," China Economic Review, Elsevier, vol. 73(C).
    13. Yulin Hou & Cem Karayalcin, 2019. "Exports of primary goods and human capital accumulation," Review of International Economics, Wiley Blackwell, vol. 27(5), pages 1371-1408, November.
    14. Bai, Jie & Wang, Yukun, 2020. "Returns to work, child labor and schooling: The income vs. price effects," Journal of Development Economics, Elsevier, vol. 145(C).
    15. Azam, Mehtabul, 2022. "Trade Liberalization and Human Capital Accumulation: Evidence from Indian Census," IZA Discussion Papers 15286, Institute of Labor Economics (IZA).
    16. David Atkin, 2016. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," American Economic Review, American Economic Association, vol. 106(8), pages 2046-2085, August.
    17. Alberto Chong & Carla Srebot, 2023. "Can Regional Trade Agreements Negatively Impact Primary Schooling?," Open Economies Review, Springer, vol. 34(2), pages 317-339, April.
    18. Nano, Enrico & Nayyar, Gaurav & Rubínová, Stela & Stolzenburg, Victor, 2021. "The impact of services liberalization on education: Evidence from India," WTO Staff Working Papers ERSD-2021-10, World Trade Organization (WTO), Economic Research and Statistics Division.
    19. Xin Wang, 2022. "Multinational firms and human capital investment: A dynamic knowledge‐capital model," The World Economy, Wiley Blackwell, vol. 45(5), pages 1564-1586, May.
    20. Liu, Maggie Y., 2023. "How does globalization affect educational attainment? Evidence from China," International Economics, Elsevier, vol. 174(C), pages 138-159.

    More about this item

    Keywords

    Exports; Education; Human capital; Skill-intensity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; 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:eee:inecon:v:106:y:2017:i:c:p:165-183. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/inca/505552 .

    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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505552 .

    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.