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Globalization and Human Capital Investment: How Export Composition Drives Educational Attainment

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Abstract

This paper demonstrates that the composition of a country's exports is an important driver of educational attainment. Using detailed trade data and a gravity-based IV technique, we identify the causal impact of changes in the pattern of a country's exports on subsequent educational attainment. Relying on within-country variation over forty-five years for more than one hundred countries, our empirical analysis shows that exports of low-skill-intensive goods depresses average years of schooling - particularly at the primary level - while exports of skill-intensive goods increases years of schooling - at higher rungs of the educational ladder. Our results provide new insights into which types of sectoral growth are most beneficial for long-term human capital formation and suggest that trade can exacerbate initial differences in factor endowments across countries.

Suggested Citation

  • Emily Blanchard & William W. Olney, 2013. "Globalization and Human Capital Investment: How Export Composition Drives Educational Attainment," Department of Economics Working Papers 2013-18, Department of Economics, Williams College, revised Mar 2015.
  • Handle: RePEc:wil:wileco:2013-18
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    File URL: http://web.williams.edu/Economics/wp/OlneyExportsandEducation.pdf
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    Cited by:

    1. Wolfgang Keller & William W. Olney, 2017. "Globalization and Executive Compensation," NBER Working Papers 23384, National Bureau of Economic Research, Inc.
    2. Lorenzo Rotunno & Adrian Wood, 2016. "Wage Inequality and Skill Supplies in a Globalised World," AMSE Working Papers 1634, Aix-Marseille School of Economics, Marseille, France.
    3. Gu, Grace Weishi & Malik, Samreen & Pozzoli, Dario & Rocha, Vera, 2016. "Trade Induced Skill Upgrading: Lessons from the Danish and Portuguese Experiences," IZA Discussion Papers 10035, Institute for the Study of Labor (IZA).
    4. Adrian Wood, 2017. "Variation in structural change around the world, 1985–2015: Patterns, causes and implications," WIDER Working Paper Series 034a, World Institute for Development Economic Research (UNU-WIDER).
    5. Roberto Alvarez & Damián Vergara, 2016. "Natural Resources and Education: Evidence from Chile," Working Papers wp433, University of Chile, Department of Economics.
    6. Greenland, Andrew & Lopresti, John, 2016. "Import exposure and human capital adjustment: Evidence from the U.S," Journal of International Economics, Elsevier, vol. 100(C), pages 50-60.

    More about this item

    Keywords

    Exports; Education; Human Capital; Structural Change;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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