EconPapers    
Economics at your fingertips  
 

Skill-Specific rather than General Education: A Reason for US--Europe Growth Differences?

Dirk Krueger () and Krishna Kumar ()

Journal of Economic Growth, 2004, vol. 9, issue 2, 167-207

Abstract: In this paper, we develop a model of technology adoption and economic growth in which households optimally obtain either a concept-based, "general" education or a skill-specific, "vocational" education. General education is costly to obtain, but enables workers to operate new production technologies. Firms weigh the cost of adopting and operating new technologies against increased profits and optimally choose the level of adoption. We show that an economy whose policies favor vocational education will grow slower in equilibrium than one that favors general education. More importantly, the gap between their growth rates will increase with the growth rate of available technology. By characterizing the optimal Ramsey education policy we also demonstrate that the optimal subsidy for general education increases with the growth rate of available technology. Our theory suggests that European education policies that favored specialized, vocational education might have worked well, both in terms of growth rates and welfare, during the 1960s and 1970s when available technologies changed slowly. However, in the information age of the 1980s and 1990s when new technologies emerged at a more rapid pace, they might have contributed to an increased growth gap relative to the United States.

Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (141) Track citations by RSS feed

Downloads: (external link)
http://journals.kluweronline.com/issn/1381-4338/contents (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Skill-specific rather then General Education: A Reason for US-Europe Growth Differences? (2003) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jecgro:v:9:y:2004:i:2:p:167-207

Ordering information: This journal article can be ordered from
http://www.springer. ... th/journal/10887/PS2

Access Statistics for this article

Journal of Economic Growth is currently edited by Oded Galor

More articles in Journal of Economic Growth from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2023-01-25
Handle: RePEc:kap:jecgro:v:9:y:2004:i:2:p:167-207