Education and growth in France and in a panel of 21 OECD countries

C. L'Angevin and N. Laïb
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C. L'Angevin: Insee
N. Laïb: Insee

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: In France, the number of years of schooling is high, and so is spending on education. Over the past thirty years, spending per student has increased, in particular because of the growing importance of the secondary and tertiary levels. What, more generally, is the impact of education on the growth of productivity in France in the medium term? Neo-classical growth theories stress the role of the accumulation of human capital in growth in developed countries. We estimate a medium-term growth-accounting equation based on panel data for 21 OECD countries over the 1971-1998 period. An « error correction form » allows us to capture the differences in short-run dynamics between the countries of the panel. We observe a significant positive effect of the average number of years of schooling of the working-age population on productivity per capita in the medium run. The apparent « social » returns to an additional year of schooling are estimated at 7% on average for OECD countries and at 10-11% for France. This effect must be interpreted with caution. First it applies at best around current values of the number of years of schooling. Second, it does not mean that all forms of education expenditures have a high potential impact on economic growth. In this respect, we know that France differs from other OECD countries in the sense that it spends relatively more on a student in the secondary level and relatively less on a student in the tertiary level. Introducing a degree effect into the growth-accounting equation for France supports the idea that investing in longer, tertiary education has a greater impact, in the medium run, on productivity, than investing in shorter, professionalizing education.

Keywords: Education; human capital; growth; panels (search for similar items in EconPapers)
JEL-codes: I20 I21 I23 I28 O40 O47 (search for similar items in EconPapers)
Date: 2005
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