Impact of education on economic growth

• Does learning to add up add up? The returns to schooling in aggregate data. This is a chapter in the Handbook of Education Economics and addresses the question of whether the cross national data on the growth of output (GDP per worker) are consistent with the microeconomic (Mincer regression) data on the returns to schooling. This paper provides a review of the literature about the links between economic growth and the evolution of schooling, with particular emphasis on the developing countries and on the implications for various growth theories. The main point to emerge from this review was that the functional form of the mapping from data on years of schooling to the measures of "schooling capital" is absolutely central to explaining the reported empirical findings in the literature. In particular, there is a common myth that many of the findings of little or no impact of schooling capital growth on output per worker growth are due to "measurement error"--this is not true, the results are really due to the difference in the functional forms of the S to HK mapping and in paricular, one can parametrically encompass all of the existing literature with variations in what is assumed about the economy wide relationship between returns and the level of schooling across countries.

• Where has all the education gone?
  World Bank Economic Review 15(3) This is the only article I have written on this topic, but this is a pressing issue. That is, it has been a commonplace of the development literature since the 1950s that education was a key to development. Many believed that education was "extra good" in that it conveyed powerful externalities (hence creating a normative rationale for some government subsidy--but see above). However, as this paper shows it is very difficult to make the data show that education has been a panacea--or even that the return estimated from macroeconomic data is larger than would be expected from the microeconomic returns commonly estimated from household data. (World Bank Economic Review web site). (PDF version of the article).

• Does Schooling Help Explain Any of the Big Facts About Growth? (February 2009).

• Producing superstars for the economic Mundial: The Mexican Predicament with quality of education. (November 2008).

• Much Higher Schooling, Much Lower Wages: Human Capital and Economic Collapse in Venezuela. (with Daniel Ortega). This is a paper done for the volume "Ananatomy of a Collapse" examining explanations of the causes of the economic collapse in Venezeula. We examine the question of whether the lack of schooling, or lack of investments in schooling, could have had any role in this. The answer is no. In fact, in explaining why output fell the inclusion of schooling makes the puzzle even deeper because the rise in schooling should have led wages to increase by more than 50 percent when in fact they fell by 50 percent.

• I regard this area as still an open puzzle. At least part of the solution is that education has a higher return when technological progress is more rapid (as in Rosenzweig and Foster). At least part of the solution is that the difference between the microeconomic (private) and macroeconomic (social) returns to education depends on the economic environment. In a sufficiently poor institutional climate in which rent-seeking is rife more education can be privately profitable but socially damaging. In contrast in a sufficiently positive institutional climate it is plausible that, at least over some ranges, education could create positive externalities. Documenting this empirically in a convincing manner is a challenge.