Mikael Lindahl

First name
Mikael
Last name
Lindahl

Year of Publication
2000
Keywords
Abstract

This paper summarizes and tries to reconcile evidence from the microeconometric and empirical
macro growth literatures on the effect of schooling on income and GDP growth. Much
microeconometric evidence suggests that education is an important causal determinant of income
for individuals within countries. At a national level, however, recent studies have found that
increases in educational attainment are unrelated to economic growth. This discrepancy appears to
be a result of the high rate of measurement error in first-differenced cross-country education data.
Afier accounting for measurement error, the effect of changes in educational attainment on income
growth in cross-country data is at least as great as microeconometric estimates of the rate of return
to years of schooling. Another finding of the macro growth literature -- that economic growth
depends positively on the initial stock of human capital -- is not robust when the assumption of a
constant-coefficient model is relaxed.

Number
429
Date Published
01/2000
Publication Language
eng
Citation Key
Journal of Economic Literature, Vol. 39, No. 4, December 2001
Lindahl, M., & Krueger, A. (2000). Education for Growth: Why and For Whom?. Retrieved from http://arks.princeton.edu/ark:/88435/dsp011831cj939 (Original work published 01/2000AD)
Working Papers

Year of Publication
1998
Keywords
Abstract

This paper tries to reconcile evidence on the effect of schooling on income and on GDP growth
from the microeconometric and empirical macro growth literatures. Much microeconometric
evidence suggests that education is an important causal determinant of income for individuals
within countries as diverse as Sweden and the United States. At a national level, however, recent
studies have found that increases in educational attainment are unrelated to economic growth.
This finding is shown to be a spurious result of the extremely high rate of measurement error in
first-differenced cross-country education data. Afier accounting for measurement error, the
effect of changes in educational attainment on income growth in cross-country data is at least as
great as microeconometric estimates of the rate of return to years of schooling. We also
investigate another finding of the macro growth literature -- that economic growth depends
positively on the initial stock of human capital. We find that the effect of the initial level of
education on growth is sensitive to the econometric assumptions that are imposed on the data
(e.g., constant-coefficient assumption), as well as to the other covariates included in the model.
Perhaps most importantly, we find that the initial level of education does not appear to have a
significant effect on economic growth among OECD countries. The conclusion comments on
policy implications for Sweden based on the human capital literature.

Number
411
Date Published
12/1998
Publication Language
eng
Citation Key
Swedish Economic Policy Review, vol. 6, no. 2, Autumn 1999.
Lindahl, M., & Krueger, A. (1998). Education for Growth in Sweden and the World. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01s7526c41b (Original work published 12/1998AD)
Working Papers