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The Causes and Consequences of Cross-Country Differences in Schooling Attainment

  • Schoellman, Todd

This paper uses labor market evidence to quantify the importance of quality-adjusted schooling differences in accounting for cross-country income differences. I model labor markets that are consistent with cross-country data on schooling attainment, education quality, and the average returns to schooling of a country’s emigrants and its non-migrants. The model suggests that the Mincerian returns to schooling of immigrants to the United States measure the education qualities of their source countries. Measured this way, quality differences across countries are large, and the calibrated model shows that schooling accounts for a factor of 5 of the income difference between the U.S. and the poorest countries. The evidence suggests that immigrants to the U.S. are positively selected members of their source country, and that immigrants from developing countries are more selected than those from developed countries. Then the low education quality measured in the sample actually overestimates the education quality of the average non-migrant, particularly for developing countries. Two methods of controlling for selection among immigrants thus predict a moderately larger role for schooling, between a factor of 6.5 and 7.9.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 9243.

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Date of creation: May 2008
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Handle: RePEc:pra:mprapa:9243
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  18. Eric A. Hanushek & Victor Lavy & Kohtaro Hitomi, 2008. "Do Students Care about School Quality? Determinants of Dropout Behavior in Developing Countries," Journal of Human Capital, University of Chicago Press, vol. 2(1), pages 69-105.
  19. Dennis D. Kimko & Eric A. Hanushek, 2000. "Schooling, Labor-Force Quality, and the Growth of Nations," American Economic Review, American Economic Association, vol. 90(5), pages 1184-1208, December.
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  23. Hendricks, Lutz A., 2002. "How Important is Human Capital for Development? Evidence from Immigrant Earnings," Staff General Research Papers 11409, Iowa State University, Department of Economics.
  24. Andres Erosa & Tatyana Koreshkova & Diego Restuccia, 2006. "On the aggregate and distributional implications of productivity differences across countries," Working Paper 06-02, Federal Reserve Bank of Richmond.
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