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Human Capital and Growth: Specification Matters

Listed author(s):
  • Sunde, Uwe

    ()

  • Vischer, Thomas

    ()

This paper suggests that the weak empirical effect of human capital on growth in existing cross-country studies is partly the result of an inappropriate specification that does not account for the different channels through which human capital aspects growth. A systematic replication of earlier results from the literature shows that both, initial levels and changes in human capital, have positive growth effects, while in isolation, each channel often appears insignificant. Studies that do not account for both channels might underestimate the effect of human capital due to convergence in human capital, in particular when measuring human capital in log average years of schooling. This study therefore complements alternative explanations for the weak growth effects of human capital based on outlier observations and measurement issues.

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File URL: http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1131.pdf
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Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1131.

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Length: 33 pages
Date of creation: Aug 2011
Handle: RePEc:usg:econwp:2011:31
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  1. Andres Erosa & Tatyana Koreshkova & Diego Restuccia, 2007. "How Important is Human Capital? A Quantitative Theory Assessment of World Income Inequality," Working Papers tecipa-280, University of Toronto, Department of Economics.
  2. Christian Morrisson & Fabrice Murtin, 2009. "The Century of Education," CEP Discussion Papers dp0934, Centre for Economic Performance, LSE.
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  8. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  9. Daniel Cohen & Marcelo Soto, 2001. "Growth and Human Capital: Good Data, Good Results," OECD Development Centre Working Papers 179, OECD Publishing.
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  12. Francesco Caselli, 2004. "Accounting for Cross-Country Income Differences," NBER Working Papers 10828, National Bureau of Economic Research, Inc.
  13. Robert J. Barro & Jong-Wha Lee, 2010. "A New Data Set of Educational Attainment in the World, 1950-2010," NBER Working Papers 15902, National Bureau of Economic Research, Inc.
  14. Nadir Altinok & Hatidje Murseli, 2006. "International Database on Human Capital Quality," Post-Print halshs-00097099, HAL.
  15. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May.
  16. Eric Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Discussion Papers 07-034, Stanford Institute for Economic Policy Research.
  17. Philippe Aghion & Peter Howitt & Fabrice Murtin, 2010. "The Relationship Between Health and Growth: When Lucas Meets Nelson-Phelps," NBER Working Papers 15813, National Bureau of Economic Research, Inc.
  18. Wolfgang Lutz & Anne Goujon & Samir K.C. & Warren Sanderson, 2007. "Reconstruction of population by age, sex and level of educational attainment of 120 countries for 1970-2000," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 5(1), pages 193-235.
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  20. repec:hal:wpaper:halshs-00586751 is not listed on IDEAS
  21. Temple, Jonathan, 1999. "A positive effect of human capital on growth," Economics Letters, Elsevier, vol. 65(1), pages 131-134, October.
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