Income convergence prospects in Europe: Assessing the role of human capital dynamics

Jesus Crespo Cuaresma, Miroslava Havettová and Martin Lábaj

Economic Systems, 2013, vol. 37, issue 4, 493-507

Abstract: We employ income projection models based on human capital dynamics in order to assess quantitatively the role that educational improvements are expected to play as a driver of future income convergence in Europe. We concentrate on income convergence dynamics between emerging economies in Central and Eastern Europe and Western European countries during the next 50 years. Our results indicate that improvements in human capital contribute significantly to the income convergence potential of European emerging economies. Using realistic scenarios, we quantify the effect that future human capital investment paths are expected to have in terms of speeding up the income convergence process in the region. The income projection exercise shows that the returns to education in terms of income convergence in Europe could be sizeable, although it may take relatively long for the poorer economies of the region to rip the growth benefits.

Keywords: Economic growth; Income convergence; Human capital; Income projections; Europe; Emerging economies (search for similar items in EconPapers)
JEL-codes: I25 O47 O52 P27 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:37:y:2013:i:4:p:493-507

DOI: 10.1016/j.ecosys.2013.02.004

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