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Education, Sectoral Composition and Growth

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  • Joseph K. Kaboski

    (Ohio State University)

Abstract

Growth accounting exercises using standard human capital measures are limited in their ability to attribute causal effects and to explain growth. This paper develops a model of growth and schooling consistent with these decompositions but with less unexplained growth. The theory distinguishes between three different sources of education gains: (1) supply shifts, (2) skill-biased technical change increasing demand within industries/occupations, and (3) skill-biased technical change caused by the introduction of new skill-intensive industries/occupations. The third source leads to the large sectoral shifts and the largest growth effects. Quantitatively, schooling contributions account for 24 percent of wage growth, with both the direct (i.e., supply driven) causal contribution of schooling and the indirect causal (i.e., technology induced) contribution playing substantial roles. (Copyright: Elsevier)

Suggested Citation

  • Joseph K. Kaboski, 2009. "Education, Sectoral Composition and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 168-182, January.
    • Handle: RePEc:red:issued:06-133
    DOI: 10.1016/j.red.2008.07.003
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    Cited by:

    1. Diego Restuccia & Guillaume Vandenbroucke, 2013. "The Evolution Of Education: A Macroeconomic Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(3), pages 915-936, August.
    2. Guo, Lu & Yang, Wei, 2020. "The existence and uniqueness of the steady equilibrium in the endogenous economic growth model," MPRA Paper 100703, University Library of Munich, Germany.
    3. Francisco J. Buera & Joseph P. Kaboski, 2012. "The Rise of the Service Economy," American Economic Review, American Economic Association, vol. 102(6), pages 2540-2569, October.
    4. K M Nuruddin Sarawar & Swati Anindita Sarker & Airin Rahman & Md. Din Il Islam & Md. Shah Alamgir & K M Mehedi Adnan, 2023. "Does Human Capital Link to Agriculture Sector? Review Evidence from Bangladesh," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(10), pages 1707-1717, October.
    5. Werner, Katharina & Prettner, Klaus, 2015. "Public education and R&D-based economic growth," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112997, Verein für Socialpolitik / German Economic Association.
    6. Gillman, Max, 2021. "Steps in industrial development through human capital deepening," Economic Modelling, Elsevier, vol. 99(C).

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    More about this item

    Keywords

    Economic growth; Human capital; Structural transformation; Education;
    All these keywords.

    JEL classification:

    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • I2 - Health, Education, and Welfare - - Education

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