Schoellman, Todd (2008): Measuring and Accounting for Cross-Country Differences in Education Quality.
This is the latest version of this item.
Download (551kB) | Preview
This paper measures the role of quality-adjusted education in accounting for cross- country differences in income per worker. The returns to schooling of immigrants to the United States are used as a measure of their source-country education quality. Returns are available for 130 countries and vary by up to an order of magnitude between developed and developing countries. A model shows why the returns to schooling of immigrants and not other wage statistics are an appropriate measure of education quality. The model is consistent with the relationships between education quality, average school attainment, and the returns to schooling for immigrants and non-migrants. Calibrating the model, or augmenting a Bils and Klenow (2000)-style accounting exercise to account for education quality, yields large results. Quality- adjusted schooling is found to account for 38-42% of the income difference between the richest and poorest quintiles of countries, as opposed to the 21-24% in the current literature that accounts only for years of schooling.
|Item Type:||MPRA Paper|
|Original Title:||Measuring and Accounting for Cross-Country Differences in Education Quality|
|Keywords:||Mincer returns; education quality; growth accounting|
|Subjects:||O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
|Date Deposited:||12. Nov 2009 09:28|
|Last Modified:||12. Feb 2013 22:45|
Banerjee, A. V., and E. Duflo (2005): “Growth Theory Through the Lens of Development Economics,” in Handbook of Economic Growth, ed. by P. Aghion, and S. N. Durlauf, vol. 1A, chap. 7, pp. 473–554. Elsevier Science, North-Holland Publishers.
Barro, R. J. (1974): “Are Government Bonds Net Wealth?,” Journal of Political Economy, 82(6), 1095–1117.
Barro, R. J., and J.-W. Lee (2001): “International Data on Educational Attainment: Updates and Implications,” Oxford Economic Papers, 53(3), 541–563.
Barro, R. J., and X. Sala-i-Martin (1999): Economic Growth. The MIT Press.
Baum, S., and J. Ma (2007a): “Education Pays: The Benefits of Higher Education for Individuals and Society,” Discussion paper, College Board.
Baum, S., and J. Ma (2007b): “Trends in College Pricing,” Discussion paper, College Board.
Becker, G. S. (1964): Human Capital. University of Chicago Press, Chicago.
Ben-Porath, Y. (1967): “The Production of Human Capital and the Life Cycle of Earnings,” Journal of Political Economy, 75(4), 352–265.
Bennel, P. (1996): “Rates of Return to Education: Does the Conventional Pattern Prevail in Sub-Saharan Africa?,” World Development, 24(1), 183–199.
Bils, M., and P. J. Klenow (2000): “Does Schooling Cause Growth?,” American Economic Review, 90(5), 1160–1183.
Borjas, G. J. (1987): “Self-Selection and the Earnings of Immigrants,” American Economic Review, 77(4), 531–553.
Bratsberg, B., and D. Terrell (2002): “School Quality and Returns to Education of U.S. Immigrants,” Economic Inquiry, 40(2), 177–198.
Cameron, S. V., and C. Taber (2004): “Borrowing Constraints and the Returns to Schooling,” Journal of Political Economy, 112, 132–182.
Card, D. (2001): “Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems,” Econometrica, 69(5), 1127–1159.
Card, D., and A. B. Krueger (1992): “Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States,” Journal of Political Economy, 100(1), 1–40.
Carneiro, P., and J. Heckman (2002): “The Evidence on Credit Constraints in Post-Secondary Schooling,” Economic Journal, 112, 705–734.
Case, A., and A. Deaton (1999): “School Inputs and Educational Outcomes in South Africa,” Quarterly Journal of Economics, 114(3), 1047–1084.
Caselli, F. (2005): “Accounting for Cross-Country Income Differences,” in Handbook of Economic Growth, ed. by P. Aghion, and S. N. Durlauf, vol. 1A, chap. 9, pp. 679–741. Elsevier.
Caselli, F., and W. J. Coleman, II (2006): “The World Technology Frontier,” American Economic Review, 96(3), 499–522.
Cordoba, J. C., and M. Ripoll (2007): “The Role of Education in Development,” mimeo, University of Pittsburgh.
Cunha, F., and J. Heckman (2007): “The Technology of Skill Formation,” American Economic Review, 97(2), 31–47.
Denny, C. (ed.) (2005): Human Development Report 2005. United Nations Development Programme.
Erosa, A., T. Koreshkova, and D. Restuccia (2007): “On the Aggregate and Distributional Implications of Productivity Differences across Countries,” mimeo, University of Toronto.
Hall, R. E., and C. I. Jones (1999): “Why Do Some Countries Produce So Much More Output Per Worker Than Others?,” Quarterly Journal of Economics, 114(1), 83–116.
Hanushek, E., and L. Woessmann (2007): “The Role of School Improvement in Economic Development,” PEPG 07-01.
Hanushek, E. A. (1995): “Interpreting Recent Research on Schooling in Developing Countries,” World Bank Research Observer, 10(2), 227–246.
Hanushek, E. A. (2002): “Publicly Provided Education,” in Handbook of Public Economics, ed. by A. J. Auerbach, and M. Feldstein, vol. 4, chap. 30, pp. 2045–2141. Elsevier Science, North-Holland Publishers.
Hanushek, E. A., and D. D. Kimko (2000): “Schooling, Labor-Force Quality, and the Growth of Nations,” American Economic Review, 90(5), 1184–1208.
Hanushek, E. A., V. Lavy, and K. Hitomi (2006): “Do Students Care About School Quality? Determinants of Dropout Behavior in Developing Countries,” NBER Working Paper 12737.
Hendricks, L. (2002): “How Important Is Human Capital for Development? Evidence from Immigrant Earnings,” American Economic Review, 92(1), 198–219.
Hendricks, L. (2009): “Cross-country Variation in Educational Attainment: Structural Change or Within Industry Skill Upgrading?,” mimeo, UNC - Chapel Hill.
Heston, A., R. Summers, and B. Aten (2006): Penn World Table Version 6.2. Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania.
Jasso, G., D. S. Massey, M. R. Rosenzweig, and J. P. Smith (2000): “The New Immigrant Survey Pilot (NIS-P): Overview and New Findings About U.S. Legal Immigrants at Admission,” Demography, 37(1), 127–138.
Jones, B. F. (2008): “The Knowledge Trap: Human Capital and Development Reconsidered,” NBER Working Paper 14138.
Kalemli-Ozcan, S., H. E. Ryder, and D. N. Weil (2000): “Mortality Decline, Human Capital Investment, and Economic Growth,” Journal of Development Economics, 62, 1– 23.
Klenow, P. J., and A. Rodriguez-Clare (1997): “The Neoclassical Revival in Growth Economics: Has It Gone Too Far?,” in NBER Macroeconomics Annual 1997, ed. by B. S. Bernanke, and J. J. Rotemberg, pp. 83–103. The MIT Press.
Manuelli, R. E., and A. Seshadri (2005): “Human Capital and the Wealth of Nations,” Mimeo, University of Wisconsin - Madison.
Mincer, J. (1958): “Investment in Human Capital and Personal Income Distribution,” Journal of Political Economy, 66(4), 281–302.
Oreopoulos, P. (2007): “Do Dropouts Drop Out Too Soon? Wealth, Health, and Happiness from Compulsory Schooling,” Journal of Public Economics, 91, 2213–2229.
Psacharopoulos, G., and H. A. Patrinos (2004): “Returns to Investment in Education: A Further Update,” Education Economics, 12(2), 111–134.
Ruggles, S., M. Sobek, T. Alexander, C. A. Fitch, R. Goeken, P. K. Hall, M. King, and C. Ronnander (2004): “Integrated Public Use Microdata Series: Ver- sion 3.0 [Machine-readable database],” Minneapolis, MN: Minnesota Population Center [producer and distributor], http://www.ipums.org.
Schott, P. K. (2003): “One Size Fits All? Heckscher-Ohlin Specialization in Global Production,” American Economic Review, 93(2), 686–708.
Soares, R. R. (2005): “Mortality Reductions, Educational Attainment, and Fertility Choice,” American Economic Review, 95(3), 580–601.
Stinebrickner, R., and T. R. Stinebrickner (2008): “The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study,” American Economic Review, 98(5), 2163–2184.
Tamura, R. (2001): “Teachers, Growth, and Convergence,” Journal of Political Economy, 109, 1021–1059.
Tamura, R. (2006): “Human Capital and Economic Development,” Journal of Development Economics, 79, 26–72.
U.S. Immigration and Naturalization Service (1998-2000): Statistical Yearbook of the Immigration and Naturalization Service, 1998-2000. U.S. Government Printing Office, Washington, D.C.
You, H. M. (2008): “The Contribution of Rising School Quality to U.S. Economic Growth,” mimeo, University at Buffalo, SUNY.
Available Versions of this Item
The Causes and Consequences of Cross-Country Differences in Schooling Attainment. (deposited 20. Jun 2008 00:32)
The Causes and Consequences of Cross-Country Differences in Schooling Attainment. (deposited 01. Nov 2009 14:54)
- Measuring and Accounting for Cross-Country Differences in Education Quality. (deposited 12. Nov 2009 09:28) [Currently Displayed]
- The Causes and Consequences of Cross-Country Differences in Schooling Attainment. (deposited 01. Nov 2009 14:54)