Education and Cross-Country Productivity Differences

Alok Kumar () and Brianne Kober

No 1404, Department Discussion Papers from Department of Economics, University of Victoria

Abstract: In this paper, we study the effects of education on the total factor productivity (TFP) of a large number of countries. We estimate TFP using a variant of augmented Solow growth model in which health capital is one of the factors of production. We find that quantity of education significantly and positively affects TFP. This result is in contrast to the findings of the previous literature, that suggest that either the quantity of education does not matter for growth (e.g. Benhabib and Spiegel 1994, Caselli et al. 1996) or only the quality of education matters for growth (e.g. Hanushek and Kimko 2000). We also find that TFP differences explain about 1/3rd of per-capita real income differences across countries. This estimate is substantially lower than the existing estimates (e.g. Klenow and Rogriguez-Clare 1997, Hall and Jones 1999) which suggest that TFP differences are the dominant source of per-capita real income differences across countries.

Keywords: Augmented Solow Growth Model; TFP; Quantity and Quality of Education; Health (search for similar items in EconPapers)
JEL-codes: E23 F43 N10 N30 O47 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-07-25
New Economics Papers: this item is included in nep-cse, nep-edu, nep-eff, nep-gro and nep-mac
Note: ISSN 1914-2838
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:vic:vicddp:1404

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