Influence The Education Levels on Income Worldwide: Empirical Evidence

Alali, Walid Y. (2012): Influence The Education Levels on Income Worldwide: Empirical Evidence.

Abstract

In this paper, I constructed a worldwide novel panel model to investigate the estimation returns of the education levels using the function of the aggregate production approach of education human capital growth using the Mincerian method to acquire an equation of a log-liner, considering the possibility of heterogeneity of the countries. We split the data samples based on the levels of schooling quality and develop the economy of the countries. Our estimation shows the effect of the differences or heterogeneity on the schooling levels among the countries which appear especially post-secondary or tertiary schooling level specified has more impact in developed countries with high quality of schooling learning than effect secondary and primary school levels, while vice versa is true in developing countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic Development, Growth, Human Capital, Labour Productivity; Poverty, Health, Human Development
• Subjects: I - Health, Education, and Welfare > I2 - Education and Research Institutions > I23 - Higher Education ; Research Institutions; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; P - Economic Systems > P4 - Other Economic Systems > P46 - Consumer Economics ; Health ; Education and Training ; Welfare, Income, Wealth, and Poverty

References

Barro, R.J. and Lee, J.W.L. (2010) A New Data Set of Education Attainment in the World, 1950-2010. NBER Working Paper No.15902.National Bureau of Economic Research, 104, 184-198. 699-749.

Acemoglu, D. (2009). Introduction to Modern Economic Growth (First d.). Princeton University Press.

Aghion, P., C. Meghir, and J. Vandenbussche (2006). Growth, distance to frontier and composition of human capital. Journal of Economic Growth 11, 97–127.

Arora, S. (2002) Health, Human Productivity, and Long-Term Economic Growth. Journal of Economic History, No. 3,

Barro, R. J. (1997). Determinants of Economic Growth: A Cross-Country Empirical Study (First ed.). The MIT Press.

Barro, R. J. and J.-W. Lee (1993). International comparisons of educational attainment. Journal of Monetary Economics 32 (3), 363–394.

Barro, R. J. and J.-W. Lee (1994). Sources of economic growth. Carnegie-Rochester Conference Series on Public Policy 40, 1–46.

Barro, R. J. and X. Sala-i Martin (1995). Economic Growth. McGraw Hill: Boston, MA.

Becker, G. S. (1993). Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (Third.). The University of Chicago Press: Chicago.

Benhabib, J. and M. M. Spiegel (1994). The role of human capital in economic development: Evidence from aggregate cross-country data. Journal of Monetary Economics 34, 143–173.

Benhabib, J. and Spiegel, M. (2005) Human Capital and Technology Diffusion. Handbook of Economic Growth, 1, 935-966. http://dx.doi.org/10.1016/S1574-0684(05)01013-0

Bloom, D.E., Canning, D. and Sevilla, J. (2004) The Effect of Health on Economic Growth: A Production Function Approach. World Development, 32, 1-13. http://dx.doi.org/10.1016/j.worlddev.2003.07.002

Bond, S., A. Hoeffler, and J. Temple (2001). GMM estimation of empirical growth models.

Card, D. (1999). The causal effect of education on earnings. In O. Ashenfelter and D. Card (Eds.), Handbook of Labour Economics, Volume 3, Chapter 30, pp. 1801–1863.

Caselli, F. (2005). Accounting for cross-country income differences. In P. Aghion and S. Durlauf (Eds.), Handbook of Economic Growth, Volume 1A, Chapter 9, pp. 679–741.

Caselli, F., G. Esquivel, and F. Lefort (1996). Reopening the convergence debate: A new look at cross-country growth empirics. Journal of Economic Growth 1 (3), 363–389.

Chatterji, M. (1998). Tertiary education and economic growth. Regional Studies 32 (4), 349–354.

Cohen, D. and M. Soto (2007). Growth and human capital: Good data, good results. Journal of Economic Growth 12, 51–76.

Cohen, D. and Soto, M. (2007) Growth and Human Capital: Good Data, Good Results. Journal of Economic Growth, 12, 51-76. http://dx.doi.org/10.1007/s10887-007-9011-5

de la Fuente, A. and R. Domenech (2002). Human capital in growth regressions: How much difference does data quality make? An update and further results. Working paper, Instituto de Analisis Economico, Campus UAB.

Durlauf, S. N. and P. A. Johnson (1995). Multiple regimes and cross-country growth behaviour. Journal of Applied Econometrics 10, 365–384.

Durlauf, S. N., P. A. Johnson, and J. R. W. Temple (2005). Growth econometrics. In P. Aghion and S. N. Durlauf (Eds.), Handbook of Economic Growth, Volume 1A, Chapter 8, pp. 555–677.

Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford. Finance and Economics, No. 4, 15-25.

Gradstein, M., M. Justman, and V. Meier (2005). The Political Economy of Education: Implications for Growth and Inequality (First ed.). The MIT Press: Cambridge, MA.

Griliches, Z. (1997). Education, human capital, and growth: A personal perspective. Journal of Labour Economics 15 (1), S330–S344.

Hall, R. 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. A. and D. D. Kimko (2000). Schooling, labour-force quality, and the growth of nations. American Economic Review 90 (5), 1184–1208.

Hanushek, E. A. and L. ossmann (2007). The role of education quality in economic growth. Working Paper 4122, World Bank Policy Research.

Hua, P. (2005) The Effects of Different Educational Levels on the Growth of Total Factor Productivity: An Empirical Study from China’s Provinces. Economics, No. 10, 147-165.

Islam, N. (1995). Growth empirics: A panel data approach. Quarterly Journal of Economics 110 (4), 1127–1170.

Klenow, P. and A. Rodriguez-Clare (1997a). The neoclassical revival in growth economics: Has it gone too far? In B. Bernanke and J. Rotemberg (Eds.), NBER Macroeconomics Annual, pp. 73–102. Cambridge, MA: MIT Press.

Klenow, P. J. and A. Rodriguez-Clare (1997b). Economic growth: A review essay. Journal of Monetary Economics 40 (3), 597–617.

Krueger, A. B. and M. Lindahl (2001). Education for growth: Why and for whom? Journal of Economic Literature 39, 1101–1136.

Kyriacou, G. (1991). Level and growth effects of human capital. Working paper, C.V. Starr Center, New York.

Lau, L. J., D. T. Jamison, and F. F. Louat (1991). Education and productivity in developing countries: an aggregate production function approach. Policy Research Working Paper Series 612, The World Bank.

Liu, C.S. and Jian, Y.F. (2010) Life Expectancy, Education Capital and Endogenous Economic Growth. Contemporary

Mankiw, G. N., D. Romer, and D. N. Weil (1992). Contribution to the empirics of economic growth. Quarterly Journal of Economics 107 (2), 407–437.

McGrattan, E. R. and J. J. Schmitz (1999). Explaining cross-country income differences. In J. B.

Murphy, K. M., A. Shleifer, and R. W. Vishny (1991). The allocation of talent: Implications for growth. Quarterly Journal of Economics 106 (2), 503–530.

Psacharopoulos, G. (1981). Returns to investment in education: A global update. World Development 22 (9), 1325–1343.

Psacharopoulos, G. (1994). Returns to education: An updated international comparison. Comparative Education 17 (3), 321–341.

Psacharopoulos, G. and H. A. Patrinos (2004). Returns to investment in education: A further update. Education Economics 12 (2), 111–134.

Sala-i Martin, X. (1994). Cross-sectional regressions and the empirics of economic growth. European Economic Review 38, 739–747.

Schultz, T. W. (1961). Investment in human capital. American Economic Review LI (1), 1–17.

Sianesi, B. and J. van Reenen (2003). The returns to education: Macroeconomics. Journal of Economic Surveys 17, 157–200.

Soto, M. (2002). Rediscovering education in growth regressions. OECD Development Centre Working Papers 202.

Soto, M. (2008). The causal effect of education on aggregate income. Working paper, Instituto de Analysis Economic, Campus UAB.

Summers, R., A. Heston, and B. Aten. Penn World Table version 5.6. Dataset, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania.

Taylor and M. Woodford (Eds.), Handbook of Macroeconomics, Volume 1, Chapter 10, pp. 669–737.

Temple, J. (1999a). The new growth evidence. Journal of Economic Literature 37 (1), 112–156.

Temple, J. (1999b). A positive effect of human capital on growth. Economics Letters 65 (1), 131– 134. Temple, J. R. W. (2001). Generalizations that aren’t? Evidence on education and growth. European Economic Review 45 (4-6), 905–918.

Wossmann, L. (2002). Cross-country evidence on human capital and the level of economic development: The role of measurement issues in education. Historical Social Research 27 (4), 47–76.

Wolff, E.N. (2000) Human Capital Investment and Economic Growth: Exploring the Cross-Country Evidence. Structural Change & Economic Dynamics, 11, 433-472. http://dx.doi.org/10.1016/S0954-349X (00)00030-8

Wossmann, L. (2003). Specifying human capital. Journal of Economic Surveys 17 (3), 239–270.