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Globalization and human capital investment: Export composition drives educational attainment

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  • 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
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    Cited by:

    1. Yue Teng & Dic Lo, 2019. "Determinants of Developing Countries' Export Upgrading: The Role of China and Productive Investment," Working Papers 227, Department of Economics, SOAS, University of London, UK.
    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. Keller, Wolfgang & Olney, William W., 2021. "Globalization and executive compensation," Journal of International Economics, Elsevier, vol. 129(C).
    4. Nina Pavcnik, 2017. "The Impact of Trade on Inequality in Developing Countries," NBER Working Papers 23878, National Bureau of Economic Research, Inc.
    5. Yang, Han, 2020. "Dynamic Trade, Education and Intergenerational Inequality," MPRA Paper 99976, University Library of Munich, Germany.
    6. Cevat G. Aksoy & Sergei Guriev & Daniel S. Treisman, 2018. "Globalization, Government Popularity, and the Great Skill Divide," NBER Working Papers 25062, National Bureau of Economic Research, Inc.
    7. Lee, Maxine J., 2021. "The effect of import competition on educational attainment at the postsecondary level: Evidence from NAFTA," Economics of Education Review, Elsevier, vol. 82(C).
    8. Rotunno, Lorenzo & Wood, Adrian, 2020. "Wage inequality and skill supplies in a globalised world," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 529-547.
    9. Alvarado, Rafael & Tillaguango, Brayan & López-Sánchez, Michelle & Ponce, Pablo & Işık, Cem, 2021. "Heterogeneous impact of natural resources on income inequality: The role of the shadow economy and human capital index," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 690-704.
    10. He, Chuan & Mau, Karsten & Xu, Mingzhi, 2021. "Trade Shocks and Firms Hiring Decisions:," Research Memorandum 001, Maastricht University, Graduate School of Business and Economics (GSBE).
    11. Arash Ketabforoush Badri & Parsa Ketabforoush Badri & Mostafa Cham, 2019. "R&D Spending and Economic Growth in Selected OECD Countries," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 5(2), pages 48-54.
    12. Duncan, Roberto & Toledo, Patricia, 2019. "Inequality in body mass indices across countries: Evidence from convergence tests," Economics & Human Biology, Elsevier, vol. 33(C), pages 40-57.
    13. Carlos A. CARRASCO & Edgar D. TOVAR-GARCIA, 2020. "Export Composition and the Eurozone Trade Balance in Manufacturing Goods," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 134-150, March.
    14. 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.
    15. Naudé, Wim & Surdej, Aleksander & Cameron, Martin, 2019. "The Past and Future of Manufacturing in Central and Eastern Europe: Ready for Industry 4.0?," IZA Discussion Papers 12141, Institute of Labor Economics (IZA).
    16. Yang, Han, 2019. "Dynamic Trade, Education and Intergenerational Inequality," MPRA Paper 96054, University Library of Munich, Germany.
    17. Hitoshi Sato, 2021. "Industrialization of Developing Economies in the Global Economy with an Infectious Disease," The Developing Economies, Institute of Developing Economies, vol. 59(2), pages 126-153, June.
    18. Li, Bingjing, 2018. "Export expansion, skill acquisition and industry specialization: evidence from china," Journal of International Economics, Elsevier, vol. 114(C), pages 346-361.
    19. Bolhuis, Marijn, 2019. "Catch-Up Growth and Inter-Industry Productivity Spillovers," MPRA Paper 94730, University Library of Munich, Germany.
    20. Arash Ketabforoush Badri & Parsa Ketabforoush Badri, 2017. "Effective Factors on Exports with Emphasis on Human Capital in Selected Developing Countries," Noble International Journal of Business and Management Research, Noble Academic Publsiher, vol. 1(12), pages 160-167, December.
    21. Li, Jie & Lu, Yi & Song, Hong & Xie, Huihua, 2019. "Long-term impact of trade liberalization on human capital formation," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 946-961.
    22. 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.
    23. Sabine Deij & Jakob B. Madsen & Laura Puzzello, 2021. "When are instruments generated from geographic characteristics in bilateral relationships invalid?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(4), pages 437-452, June.
    24. Li, Jie, 2021. "Women hold up half the sky? Trade specialization patterns and work-related gender norms," Journal of International Economics, Elsevier, vol. 128(C).
    25. Zhao, Liqiu & Wang, Fei & Zhao, Zhong, 2021. "Trade liberalization and child labor," China Economic Review, Elsevier, vol. 65(C).

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    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

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