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The role of education supply in economic growth and the dynamics of skills


  • BARTHELEMY, Vincent

    (GREQAM, Université de la Méditerranée)

  • MICHEL, Philippe

    (IUF, GREQAM, Université de la Méditerranée and CORE, Louvain la Neuve, Belgium)


This paper analyzes the role of the structure of skills in economic development through investment in human capital. With a lack of credit market for education and the presence of indivisibilities in investment in human capital as well as of congestion in the educational system, the initial distribution of skills affects aggregate output and investment both in the short and the long run, as there are multiple balanced growth paths. This paper provides an additional explanation for the persistent differences in per-capita output across countries. Moreover, it shows that cross-country differences in macroeconomic adjustment to educational policies can be attributed, among other factors, to differences in the distribution of skills.

Suggested Citation

  • BARTHELEMY, Vincent & MICHEL, Philippe, 1999. "The role of education supply in economic growth and the dynamics of skills," CORE Discussion Papers 1999023, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1999023

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    References listed on IDEAS

    1. Galor, Oded & Ryder, Harl E., 1989. "Existence, uniqueness, and stability of equilibrium in an overlapping-generations model with productive capital," Journal of Economic Theory, Elsevier, vol. 49(2), pages 360-375, December.
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    3. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    4. Fershtman, Chaim & Murphy, Kevin M & Weiss, Yoram, 1996. "Social Status, Education, and Growth," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 108-132, February.
    5. 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.
    6. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-298, April.
    7. Tamura, Robert, 1991. "Income Convergence in an Endogenous Growth Model," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 522-540, June.
    8. Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, vol. 54(3), pages 339-359, July.
    9. Chiu, W Henry, 1998. "Income Inequality, Human Capital Accumulation and Economic Performance," Economic Journal, Royal Economic Society, vol. 108(446), pages 44-59, January.
    10. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-834, August.
    11. Mark Gradstein & Moshe Justman, 1996. "The political economy of mixed public and private schooling: A dynamic analysis," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(3), pages 297-310, July.
    12. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity


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