Education, Growth and Income Inequality

Coen N. Teulings () and Thijs van Rens
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Coen N. Teulings: SEO, University of Amsterdam

No 02-001/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Estimates of the effect of education on GDP (the social return) have been hard to reconcile with micro evidence on the private return to schooling. We present a simple explanation combining two ideas: imperfect substitution and endogenous skill-biased technological progress and use cross-country panel data on inequality and GDP to test these ideas. A one-year increase in the level of education reduces the private return by 2 percentage points, consistent with Katz-Murphy's (1992) elasticity of substitution. We find no evidence for reversal of this initial effect as in Acemoglu (2002). In the short run, the social return equals the private return.

This discussion paper has resulted in a publication in the Review of Economics and Statistics , 2008, 90(1), 89-104.

Keywords: education; inequality; growth (search for similar items in EconPapers)
JEL-codes: E20 J24 O10 O15 (search for similar items in EconPapers)
Date: 2002-01-22, Revised 2003-03-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Education, Growth, and Income Inequality (2008)
Working Paper: Education, growth and income inequality (2006)
Working Paper: Education, Growth and Income Inequality (2003)
Working Paper: Education, Growth and Income Inequality (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20020001

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