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Human Capital Composition, Proximity to Technology Frontier and Productivity Growth

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  • Md. Rabiul Islam

Abstract

The role of human capital composition has been given importance in the most recent endogenous growth models. Assuming that primary as well as secondary education is more suitable for imitation and higher education is more appropriate for innovation, this paper empirically investigates whether the contribution of human capital to productivity growth depends on the composition of human capital and the proximity to technology frontier in a panel of 87 sample countries over the period of 1970 to 2004. The sample is further divided into 28 high, 37 medium, and 22 low income countries to gain some insights into the importance of composition effects of human capital on growth in developing countries relative to their developed counterparts. Using different levels of human capital data from four alternative sources empirical results from system GMM estimator demonstrate that growth enhancing effect of skilled human capital increases with the proximity to the technology frontier only for high and medium income countries. Unskilled human capital is contributing more for low income countries as they move closer to the technology frontier. Matured workers with tertiary education are more growth enhancing for high and medium income countries, whereas younger workers with secondary education are more growth improving for low income countries. Estimated results are consistent across male and female workers.

Suggested Citation

  • Md. Rabiul Islam, 2010. "Human Capital Composition, Proximity to Technology Frontier and Productivity Growth," Monash Economics Working Papers 23-10, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2010-23
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2010/2310humanislam.pdf
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    References listed on IDEAS

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    1. Angel de la Fuente & Rafael Doménech, 2006. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 1-36, March.
    2. Angel de la Fuente & Rafael Domenech, 2001. "Schooling Data, Technological Diffusion, and the Neoclassical Model," American Economic Review, American Economic Association, vol. 91(2), pages 323-327, May.
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    Cited by:

    1. M. Danquah & B. Ouattara, 2014. "Productivity Growth, Human Capital And Distance To Frontier In Sub-Saharan Africa," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(4), pages 27-48, December.
    2. Yong Jin Kim & Akiko Terada-Hagiwara, 2013. "A Survey On The Relationship Between Education And Growth With Implications For Developing Asia," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-21.
    3. Gregorio Giménez, 2011. "Imitations, economic activity and welfare," Documentos de Trabajo dt2011-03, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.

    More about this item

    Keywords

    Human capital composition; proximity; technology frontier; growth; GMM; world;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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