Formal Education and Public Knowledge

Maurizio Iacopetta ()

No 2010-33, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

Abstract: In this paper, I examine the transitional dynamics of an economy populated by individuals who split their time between acquiring a formal education, producing final goods, and innovating. The paper has two objectives: (i) uncovering the macroeconomic circumstances that favored the rise of formal education; (ii) to reconcile the remarkable growth of the education sector with the constancy of other key macroeconomic variables, such as the interest rate, the consumption-output ratio, and the growth rate of per capita income (Kaldor facts). The transitional dynamics of human capital growth models, such as Lucas (1988), would attribute the arrival of education to the diminishing marginal productivity of physical capital. Conversely, the model proposed here suggests that it is the rate of learning that catches up with the rate of return on physical capital. As technical knowledge expands, the rate of return on education increases, and this induces individuals to stay longer in school. The model's transitional paths are matched with long run U.S. educational and economic data.

Keywords: Public Knowledge; Learning Rate; Transitional Dynamics; Calibration. (search for similar items in EconPapers)
JEL-codes: J24 N30 O33 (search for similar items in EconPapers)
Date: 2010-11
New Economics Papers: this item is included in nep-dge, nep-hrm, nep-knm, nep-lab and nep-ure
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Formal education and public knowledge (2011)
Working Paper: Formal education and public knowledge (2011)
Working Paper: Formal Education and Public Knowledge (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:fce:doctra:1033

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