Human capital investment: the returns from education and training to the individual, the firm and the economy
This paper provides a non-technical review of the evidence on the returns to education and training for the individual, the firm and the economy at large. It begins by reviewing the empirical work that has attempted to estimate the true causal effect of education and training on individual earnings, focusing on the recent literature that has attempted to control for potential biases in the estimated returns to education and training. It then moves on to review the literature that has looked at the returns from human capital investments to employers. Lack of suitable data and methodological difficulties have resulted in a paucity of studies that have carried out sound empirical work on this issue. In the final part of the review, we look at the work that has tried to assess the contribution of human capital to national economic growth at the macroeconomic level. This work has generally involved using either a ‘growth accounting’ theoretical framework or ‘new growth’ theories. Although the empirical macroeconomic evidence that accompanies this work does not generally allow one to distinguish between the two approaches, there is a substantial body of evidence on the contribution of education to economic growth.
Volume (Year): 20 (1999)
Issue (Month): 1 (March)
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References listed on IDEAS
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- Ann P. Bartel, 1991. "Productivity Gains From the Implementation of Employee Training Programs," NBER Working Papers 3893, National Bureau of Economic Research, Inc.
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"Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins,"
NBER Working Papers
6106, National Bureau of Economic Research, Inc.
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- Benabou, Roland, 1996. "Heterogeneity, Stratification, and Growth: Macroeconomic Implications of Community Structure and School Finance," American Economic Review, American Economic Association, vol. 86(3), pages 584-609, June.
- Bishop, John H, 1990. "Job Performance, Turnover, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 8(3), pages 363-86, July.
- Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 501-26, May.
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