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Knowledge Capital and Aggregate Income Differences: Development Accounting for U.S. States

Eric Hanushek, Jens Ruhose (ruhose@economics.uni-kiel.de) and Ludger Woessmann

No 21295, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Improvement in human capital is often presumed important for state economic development, but little research links better education to state incomes. We develop detailed measures of worker skills in each state that incorporate cognitive skills from state- and country-of-origin achievement tests. These new measures of knowledge capital permit development accounting analyses calibrated with standard production parameters. Differences in knowledge capital account for 20-30 percent of the state variation in per-capita GDP, with roughly even contributions by school attainment and cognitive skills. Similar results emerge from growth accounting analyses. These estimates support school improvement as a strategy for state economic development.

JEL-codes: I25 J24 O47 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-gro, nep-hrm, nep-lma, nep-ltv, nep-mig and nep-ure
Note: CH DEV ED EFG LS PE
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Published as Eric A. Hanushek & Jens Ruhose & Ludger Woessmann, 2017. "Knowledge Capital and Aggregate Income Differences: Development Accounting for US States," American Economic Journal: Macroeconomics, vol 9(4), pages 184-224.

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Related works:
Journal Article: Knowledge Capital and Aggregate Income Differences: Development Accounting for US States (2017) Downloads
Working Paper: Knowledge Capital and Aggregate Income Differences: Development Accounting for US States\ (2017)
Working Paper: Knowledge Capital and Aggregate Income Differences: Development Accounting for U.S. States (2016) Downloads
Working Paper: Knowledge Capital and Aggregate Income Differences: Development Accounting for U.S. States (2016) Downloads
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