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Knowledge Capital and Aggregate Income Differences: Development Accounting for US States

Eric Hanushek (), Jens Ruhose () and Ludger Woessmann ()

American Economic Journal: Macroeconomics, 2017, vol. 9, issue 4, 184-224

Abstract: Improvement in human capital is often presumed to be 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 I26 J24 R11 R23 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/mac.20160255
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Related works:
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
Working Paper: Knowledge Capital and Aggregate Income Differences: Development Accounting for U.S. States (2015) Downloads
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