Education for Growth: Why and For Whom?


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.

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Journal of Economic Literature, Vol. 39, No. 4, December 2001
Working Papers