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Does Education Matter for Economic Growth?

Author Info

  • Delgado, Michael S.

    ()

    (Purdue University)

  • Henderson, Daniel J.

    ()

    (University of Alabama)

  • Parmeter, Christopher F.

    ()

    (University of Miami)

Abstract

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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Keywords: significance testing; mean years of schooling; human capital; irrelevant variables; nonparametric;

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Find related papers by JEL classification:
  • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
  • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
  • I20 - Health, Education, and Welfare - - Education - - - General
  • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
  • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Quelle "proxy" pour vérifier le lien entre éducation et croissance ?
    by jcbriquet in Ressources pour économistes on 2012-05-03 09:58:11
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Cited by:

  1. Baglan, Deniz & Yoldas, Emre, 2014. "Non-linearity in the inflation–growth relationship in developing economies: Evidence from a semiparametric panel model," Economics Letters, Elsevier, vol. 125(1), pages 93-96.
  2. Oleg Badunenko & Daniel Henderson & Romain Houssa, 2014. "Significant drivers of growth in Africa," Journal of Productivity Analysis, Springer, vol. 42(3), pages 339-354, December.
  3. Jakob Madsen, 2012. "Health, Human Capital Formation and Knowledge Production: Two Centuries of International Evidence," NBER Working Papers 18461, National Bureau of Economic Research, Inc.

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