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Regional Growth and Convergence: The Role of Human Capital in the Portuguese Regions

Potentially one of the most important determinants of regional economic growth and convergence is human capital, although due to a lack of data this factor is frequently omitted from econometric studies. In contrast, this paper constructs three measures of human capital at the NUTS III regional level for Portugal for the period 1991-2008 and then includes these variables in regional growth regressions. The results show that both secondary and higher levels of education have a significant positive effect on regional growth rates which may be regarded as supportive of Portuguese education policy, which over the last three decades has attempted to raise the regional human capital by locating higher education institutions across the country.

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Paper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2011_03.

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Date of creation: Sep 2011
Date of revision: Sep 2011
Handle: RePEc:lbo:lbowps:2011_03
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  1. Benhabib, Jess & Spiegel, Mark M., 2005. "Human Capital and Technology Diffusion," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 13, pages 935-966 Elsevier.
  2. Richard Blundell & Steve Bond, 1999. "GMM estimation with persistent panel data: an application to production functions," IFS Working Papers W99/04, Institute for Fiscal Studies.
  3. de la Fuente, Angel & Doménech, Rafael, 2000. "Human Capital In Growth Regressions: How Much Difference Does Data Quality Make?," CEPR Discussion Papers 2466, C.E.P.R. Discussion Papers.
  4. Marius BRÜLHART & Nicole A. MATHYS, 2007. "Sectoral Agglomeration Economies in a Panel of European Regions," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 07.04, Université de Lausanne, Faculté des HEC, DEEP.
  5. Vandenbussche, Jérôme & Aghion, Philippe & Meghir, Costas, 2006. "Growth, distance to frontier and composition of human capital," Scholarly Articles 12490648, Harvard University Department of Economics.
  6. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
  7. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
  8. Pereira, João & St. Aubyn, Miguel, 2009. "What level of education matters most for growth?: Evidence from Portugal," Economics of Education Review, Elsevier, vol. 28(1), pages 67-73, February.
  9. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  10. repec:chb:bcchwp:03 is not listed on IDEAS
  11. Petrakis, P. E. & Stamatakis, D., 2002. "Growth and educational levels: a comparative analysis," Economics of Education Review, Elsevier, vol. 21(5), pages 513-521, October.
  12. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  13. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. " Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
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