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The contribution of schooling in development accounting: results from a nonparametric upper bound

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  • Caselli, Francesco
  • Ciccone, Antonio

Abstract

How much would output increase if underdeveloped economies were to increase their levels of schooling? We contribute to the development accounting literature by describing a nonparametric upper bound on the increase in output that can be generated by more schooling. The advantage of our approach is that the upper bound is valid for any number of schooling levels with arbitrary patterns of substitution/complementarity. Another advantage is that the upper bound is robust to certain forms of endogenous technology response to changes in schooling. We also quantify the upper bound for all economies with the necessary data, compare our results with the standard development accounting approach, and provide an update on the results using the standard approach for a large sample of countries.

Suggested Citation

  • Caselli, Francesco & Ciccone, Antonio, 2013. "The contribution of schooling in development accounting: results from a nonparametric upper bound," LSE Research Online Documents on Economics 46783, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:46783
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    Cited by:

    1. Han , Xuehui & Wei, Shang-Jin, 2015. "Re-examining the Middle-Income Trap Hypothesis: What to Reject and What to Revive?," ADB Economics Working Paper Series 436, Asian Development Bank.
    2. Francesco Caselli & Antonio Ciccone, 2017. "The Human Capital Stock: A Generalized Approach Comment," Discussion Papers 1733, Centre for Macroeconomics (CFM).
    3. Lee, Jong-Wha & Lee, Hanol, 2016. "Human capital in the long run," Journal of Development Economics, Elsevier, vol. 122(C), pages 147-169.
    4. Caselli, Francesco, 2014. "The Latin American efficiency gap," LSE Research Online Documents on Economics 86336, London School of Economics and Political Science, LSE Library.
    5. Han, Xuehui & Wei, Shang-Jin, 2017. "Re-examining the middle-income trap hypothesis (MITH): What to reject and what to revive?," Journal of International Money and Finance, Elsevier, vol. 73(PA), pages 41-61.
    6. Oasis Kodila-Tedika & Simplice Asongu, 2014. "Does Intelligence Affect Economic Diversification?," Working Papers 14/039, African Governance and Development Institute..
    7. repec:eee:macchp:v2-3 is not listed on IDEAS
    8. Francesco Caselli, 2014. "The Latin American Efficiency Gap," CEP Discussion Papers dp1289, Centre for Economic Performance, LSE.
    9. Peet, Evan D. & Fink, Günther & Fawzi, Wafaie, 2015. "Returns to education in developing countries: Evidence from the living standards and measurement study surveys," Economics of Education Review, Elsevier, vol. 49(C), pages 69-90.
    10. Markus Brueckner, 2016. "Rent Extraction by Capitalists," ANU Working Papers in Economics and Econometrics 2016-634, Australian National University, College of Business and Economics, School of Economics.
    11. Aristizábal-Ramírez, María & Canavire Bacarreza, Gustavo J & Jetter, Michael, 2015. "Income Inequality in Bolivia, Colombia, and Ecuador: Different Reasons," IZA Discussion Papers 9210, Institute for the Study of Labor (IZA).
    12. Camila Rafaela Alvarenga & Joanna Georgios Alexopoulos, 2018. "The Effects Of Governmental Incentives On Higher Education Choice: A Theoretical Model," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 218, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    13. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, Elsevier.
    14. Caselli, Francesco, 2014. "The Latin American efficiency gap," LSE Research Online Documents on Economics 60358, London School of Economics and Political Science, LSE Library.
    15. Caselli, Francesco & Ciccone, Antonio, 2017. "The human capital stock: a generalized approach comment," LSE Research Online Documents on Economics 87165, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    development accounting; imperfect substitution; schooling;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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