Private versus social returns to human capital: Education and economic growth in India

Matthias Schündeln and John Playforth

European Economic Review, 2014, vol. 66, issue C, 266-283

Abstract: This paper investigates whether differences between private and social returns to education of government sector employees can contribute to an explanation of the “micro–macro paradox” in the literature on education and growth. We hypothesize that in India educated people find privately rewarding jobs in a sector in which social returns are low, namely the government sector. This could help explain high returns to education at the micro level and small or negative coefficients on education growth in growth regressions at the macro level. The empirical results, which are consistent with this hypothesis, are based on an analysis of state-level data from India spanning 40 years.

Keywords: Economic growth; Human capital; India (search for similar items in EconPapers)
JEL-codes: H70 I25 O15 O40 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:66:y:2014:i:c:p:266-283

DOI: 10.1016/j.euroecorev.2013.08.011

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