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Does Education Matter for Economic Growth?

  • Delgado, Michael S.

    ()

    (Purdue University)

  • Henderson, Daniel J.

    ()

    (University of Alabama)

  • Parmeter, Christopher F.

    ()

    (University of Miami)

Empirical growth regressions typically include mean years of schooling as a proxy for human capital. However, empirical research often finds that the sign and significance of schooling depends on the sample of observations or the specification of the model. We use a nonparametric local-linear regression estimator and a nonparametric variable relevance test to conduct a rigorous and systematic search for significance of mean years of schooling by examining five of the most comprehensive schooling databases. Contrary to a few recent papers that have identified significant nonlinearities between education and growth, our results suggest that mean years of schooling is not a statistically relevant variable in growth regressions. However, we do find evidence (within a cross-sectional framework), that educational achievement, measured by mean test scores, may provide a more reliable measure of human capital than mean years of schooling.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7089.

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Length: 29 pages
Date of creation: Dec 2012
Date of revision:
Publication status: published in: Oxford Bulletin of Economics and Statistics, 2014, 76 (3), 334-359
Handle: RePEc:iza:izadps:dp7089
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