Where has all the education gone? Nowhere, but too much

Hongchun Zhao

No 00011/2015, Working papers of the Department of Economics - University of Perugia (IT) from Università di Perugia, Dipartimento Economia

Abstract: Lant Pritchett (2001) asked a famous question, "Where has all the education gone?" bringing the lack of correlation between the growth of measured education and the growth of income in developing countries to broad attention. This finding confirms that after WWII the human capital-output ratios tend to be higher in less developed countries than those in developed countries. I explain this pattern using a dynamic general equilibrium model which explicitly considers that workers with different types have different costs when choosing schooling years and employers are unable to directly observe workers' types, and find that simulation results with public subsidies to schooling could well mimic the features of data. At last, I make a speculative but reasoned conjecture about the schooling years-output relation in 2040.

Keywords: education; informational asymmetry; signaling model; general equilibrium; heterogeneity (search for similar items in EconPapers)
JEL-codes: D82 E24 I25 O15 O47 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2015-05-15
New Economics Papers: this item is included in nep-dge, nep-edu, nep-gro and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pia:papers:00011/2015

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