Education and productivity in developing countries: an aggregate production function approach

Lawrence J. Lau, Dean Jamison and Frederic F. Louat

No 612, Policy Research Working Paper Series from The World Bank

Abstract: The estimated rates of return to education are typically (often considerably) above 10 percent a year in real terms - a respectable rate of return. The rates of return are highest for primary education, and higher in countries where educated manpower is scarcer, and the durability of educational capital can be as high as 50 years. The effect of education on real output has not been well documented. The authors have pooled data on 58 developing countries, from 1960 through 1986, to estimate an aggregate production function using as independent variables the quantities of capital, labor, land, average educational attainment of the labor force, and chronological time. They measured the percentage change in a region's real GDP in response to an increase of one year in the average educational attainment of the working age population in 1985. The estimated effects range from negative to more than 5 percent a year. The results suggest : a) a positive relationship between the level of primary schooling achieved and the size of its effect; b) a threshold of four years of schooling before primary school has an effect; and c) the effect of secondary education seems to be independent of the level of secondary schooling attained, although local factors may predominate here. The authors conclude that education is an important determinant of aggregate real output and productivity but that its effect varies considerably across countries and regions.

Keywords: Economic Theory&Research; Environmental Economics&Policies; Economic Growth; Curriculum&Instruction; Teaching and Learning (search for similar items in EconPapers)
Date: 1991-03-31
References: Add references at CitEc
Citations: View citations in EconPapers (90)

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... d/PDF/multi_page.pdf (application/pdf)

Related works:
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:wbk:wbrwps:612

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().