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Human Capital and Economic Growth in OECD Countries

  • Middendorf Torge

    ()

    (Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Hohenzollernstraße 1-3, D-45128 Essen, Germany)

Recent studies on international student performance renewed the interest in the contribution of human capital to economic growth. So far the exploration of large country comparisons delivered rather mixed results. Concentrating on OECD member countries, this paper uses panel data estimation techniques to refine this analysis. Furthermore, as theory differs about the right measure of human capital, the impact of the human capital stock as well as its rate of accumulation on economic growth is analyzed. Yet estimation results reveal only a positive impact of the human capital stock on economic growth suggesting that an increase in average schooling years by one year yields a rise in the GDP growth rate of about 0.5 percentage points. However, when taking possible endogeneity into account in an instrumental variables approach, these conclusions on the impact of the level of human capital on economic growth is demonstrated to be rather fragile.

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Article provided by De Gruyter in its journal Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik).

Volume (Year): 226 (2006)
Issue (Month): 6 (December)
Pages: 670-686

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Handle: RePEc:jns:jbstat:v:226:y:2006:i:6:p:670-686
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