Explaining educational attainment across countries and over time

Consider the following facts. In 1950, the richest countries attained an average of 8 years of schooling whereas the poorest countries 1.3 years, a large 6-fold difference. By 2005, the difference in schooling declined to 2-fold because schooling increased faster in poor than in rich countries. What explains educational attainment differences across countries and their evolution over time? We consider an otherwise standard model of schooling featuring non-homothetic preferences and a labor supply margin to assess the quantitative contribution of productivity and life expectancy in explaining educational attainment. A calibrated version of the model accounts for 90 percent of the difference in schooling levels in 1950 between rich and poor countries and 71 percent of the faster increase in schooling over time in poor relative to rich countries. These results suggest an alternative view of the determinants of low education in developing countries that is based on low productivity.     

Labor productivity growth: disentangling technology and capital accumulation

How much of the convergence in labor productivity that we observe in manufacturing is due to convergence in technology versus convergence in capital-labor ratios? To shed light on this question, we introduce a nonparametric counterfactual decomposition of labor productivity growth into growth of the capital-labor ratio (K/L), technological productivity (TEP) and total factor productivity (TFP). Our nonparametric specification enables us to model technology allowing for heterogeneity across all relevant dimensions (i.e. countries, sectors and time). Using data spanning from the 1960s to the 2000s, covering 42 OECD and non OECD countries across 11 manufacturing sectors, we find TEP and TFP to account for roughly 46 and ?6% of labor productivity growth respectively, on average. While technological growth at the world level is driven primarily by the US and a handful of other OECD countries, we find strong evidence of convergence in both technology and capital-labor ratios. Interestingly, very few of the usual growth determinants are found to enhance the process of technological catching-up.     

The long-term effects of civil conflicts on education,earnings, and fertility: Evidence from Cambodia

This paper examines the long-term effects of exposure to civil war and genocide on the educational attainment, earnings, and fertility of individuals in Cambodia. Given the well-documented causal links between schooling and labor productivity, it is surprising that past studies show that civil conflicts reduce educational attainment, but generally not earnings of individuals. Using variation in the degree of Cambodians’ exposure to civil conflicts during primary school age, we find that disruption to primary education during civil conflicts decreases educational attainment and earnings, increases fertility, and has negligible effects on health of individuals several decades later. Our findings suggest that the effect of conflict on schooling disruption has adverse consequences on long-term labor productivity and economic development.     

Do pensions foster education? An empirical perspective

The paper examines the effect of population ageing on public education spending. On the one hand, ageing is expected to have a negative effect on education, as an increasing number of retirees results in ‘intergenerational conflict’ and, hence, the condemnation of education expenditure. On the other hand, ageing, in combination with pay-as-you-go pension systems, offers incentives for the working-age generation to invest in the public education of the young in order to ‘reap’ the benefits (that is, higher income tax/contributions) of their greater future productivity. Empirical evidence derived from the application of a fixed effects approach to panel data for OECD countries shows that the increasing share of elderly people has a non-linear effect on education spending. This indicates a certain degree of intergenerational conflict. Nevertheless, we find that future population ageing, which reinforces the mechanism linking public education and pensions, reflects positively on education expenditure. Furthermore, by disaggregating total education expenditure by educational levels, we observe that this effect is led by levels of non-compulsory education, probably as a reflection of the direct connection to labor productivity.     

技术效率、技术进步与东亚经济增长——基于APEC视角的实证分析

本文运用当期DEA和序列DEA两种方法测度了1960—2004年APEC17个国家和地区的技术效率、技术进步及曼奎斯特生产率指数,并且对APEC经济增长的趋同效应进行了实证检验。本文的主要结论是:20世纪80年代,东亚地区全要素生产率平均增长超过了APEC其他地区,但是全要素生产率对于劳动生产率增长的贡献仍然低于发达国家;在整个样本期存在显著的趋同,资本积累是趋同最重要的源泉,而技术进步则使经济增长发散;序列DEA避免了技术的退步,是一种比当期DEA测度技术进步更好的方法。     

Economic Growth, TFP Convergence and the World Export of Ideas: A Century of Evidence

This paper examines the effect of international patent stock on total factor productivity for 16 OECD countries over the past 120 years. The results show that the international patent stock is highly influential for economic growth and, together with knowledge spillovers through the channel of imports, has contributed significantly to TFP growth and σ‐convergence among the OECD countries over the past 120 years.     

Catching up to the technology frontier: the dichotomy between innovation and imitation

Abstract Using data for 55 developing and developed countries, this research examines the roles of technology transfer, research intensity, educational attainment, and the ability to absorb foreign technology in explaining cross‐country differences in productivity growth. The results show that innovation is an important factor for growth in OECD countries, whereas growth in developing countries is driven by imitation. Furthermore, the interaction between educational attainment and the distance to the frontier is a significant determinant of growth in the overall sample.     

Catch-up and convergence: a model of cumulative growth

This article builds a model of cumulative growth in order to explain the patterns of convergence and divergence in levels of productivity for a large sample of developed and developing countries. Determinants of productivity growth are endogenized: investment equipment share in GDP, innovative activity and the level of schooling. The catch-up hypothesis states that lagging countries should enjoy a higher rate of productivity increase. In fact, this hypothesis must be qualified, countries that possess a ‘social capability’ can catch up to the technological leaders. The model presented here tries to take account of some important determinants of the social capability. The growth of productivity rests on a cumulative growth mechanism based on investment, innovation and education. The model is estimated for a sample of 59 countries over the period 1960–85. Contrary to most recent studies on the subject, a general pattern of divergence rather than convergence in productivity levels is found.     

The Decline of Schooling Productivity in OECD Countries

Based on Baumol's cost-disease model, we develop two alternative measures of the change in the productivity of schooling. Both productivity measures are based on changes in the relative price of schooling. We find that in most OECD countries the price of schooling has increased faster in 1970–94 than would be compatible with constant schooling productivity. In addition, we show that the average performance of pupils has remained constant at best in most OECD countries. Our results imply a larger decline in the productivity of schooling in many OECD countries than in the United States.     

Trade Policy and Productivity Growth in OECD Manufacturing *

Trade liberalization may promote economic growth in a number of ways, including by accelerating the rate of technological change. Firms that face more intense import competition may be spurred to greater rates of innovation; firms which export may absorb new technologies through their contact with international markets. This paper examines evidence on trade policy and productivity growth for a sample of thirteen OECD countries and including eighteen manufacturing sectors, using data primarily from the 1980s. Within individual sectors, there are strong productivity convergence effects within the OECD. After controlling for convergence, we find a positive association between high rates of productivity growth and low tariffs, and between high productivity growth and strong export performance. We found no particular association between high productivity growth and import penetration. The results are consistent with the possibility of positive linkages between trade liberalization and accelerated productivity growth. [F1, O4]     

New evidence on the sources of EU countries’ productivity growth—industry growth differences from R&D and competition

Recent studies on productivity growth show how competition affects innovation and TFP growth in OECD countries, but do not explicitly account for sectoral parameter heterogeneity. This paper examines whether competition and innovation have a direct effect on labor productivity growth in EU goods-producing industries separated by three different industry types. The results show that the effect of R&D on labor productivity growth is not equal across industries, but rather depends on the innovation activities of sectors. The same is true for competition and labor productivity growth. The empirical evidence indicates that in unleveled industries (i.e. industries characterized by technologically unequal firms) like Specialized Goods Suppliers and Science-Based Innovators strong labor productivity growth originates with decreased competition and increased R&D, thereby supporting Schumpeterian arguments. The findings suggest Schumpeterian effects in Supplier-Dominated Goods-Producing Industries, but reveal decreasing labor productivity growth in these sectors when competition is strongly restricted.     

50 is the new 30—long-run trends of schooling and retirement explained by human aging

Workers in the US and other developed countries retire no later than a century ago and spend a significantly longer part of their life in school, implying that they stay less years in the work force. The facts of longer schooling and simultaneously shorter working life are seemingly hard to square with the rationality of the standard economic life cycle model. In this paper we propose a novel theory, based on health and aging, that explains these long-run trends. Workers optimally respond to a longer stay in a healthy state of high productivity by obtaining more education and supplying less labor. Better health increases productivity and amplifies the return on education. The health accelerator allows workers to finance educational efforts with less forgone labor supply than in the previous state of shorter healthy life expectancy. When both life-span and healthy life expectancy increase, the health effect is dominating and the working life gets shorter if the intertemporal elasticity of substitution for leisure is sufficiently small or the return on education is sufficiently large. We calibrate the model and show that it is able to predict the historical trends of schooling and retirement.     

Income Variation and Health Expenditure: Evidence for OECD Countries

The purpose of this paper is to analyze the role health investment plays in human capital accumulation, and in so doing to demonstrate that education is not the only factor affecting the performance of the labor force and productivity. Estimates are made for the OECD countries for the period 1960–90. Investment in health contributes in a significant way to explaining variations in output through human capital, even in those countries which presumably have high levels of health.     

Growth, distance to frontier and composition of human capital

We examine the contribution of human capital to economy-wide technological improvements through the two channels of innovation and imitation. We develop a theoretical model showing that skilled labor has a higher growth-enhancing effect closer to the technological frontier under the reasonable assumption that innovation is a relatively more skill-intensive activity than imitation. Also, we provide evidence in favor of this prediction using a panel dataset covering 19 OECD countries between 1960 and 2000 and explain why previous empirical research had found no positive relationship between initial schooling level and subsequent growth in rich countries.     

INTERNATIONAL COMPARISONS OF INTER-INDUSTRY WAGE DIFFERENTIALS

We use OECD data to examine inter-industry wage differentials (relative wages among industries) for 14 OECD countries over the period 1970–85. We find, first, that the industrial wage structures have shown remarkable stability over time in terms of rank order for all the countries in the sample. Second, despite their rank order stability, wage structures show a tendency to expand or contract. While the U.S. has shown increasing industry wage dispersion between 1970 and 1985, the pattern is very mixed for other countries. Unionization is a significant factor in explaining cross-country differences. Third, industry wage rankings show some evidence of becoming increasingly similar across nations over time, and this movement is associated with a convergence of per capita incomes. Fourth, industry wage differentials are positively related to an industry's productivity growth, output growth, capital intensity, and export orientation.     

Bargaining frictions, labor income taxation, and economic performance

This paper is an attempt to explain differences in economic performance between a subset of OECD countries. We classify countries in terms of their degree of rigidity in the labor market, and use a matching model with labor/leisure choice, bargaining frictions, and labor income taxation to capture these rigidity differences. Added flexibility improves economic performance in different ways depending on whether income taxation is high or low. Feeding income taxation rates estimated from the countries at hand, we find that the model is able to replicate the observed rigidity levels. The model is also shown to reproduce well cross-country differences in non-employment population ratios and the share of part-time jobs. In the absence of rigidity differences, taxation shows little promise to replicate cross-country differences, as it has insufficient quantitative effects on production and productivity. However, the interaction of rigidity and income taxation is crucial in explaining the empirical patterns of the non-employment rate and of the share of part-time jobs.     

Accumulation, innovation and catching-up: an extended cumulative growth model

This paper presents an extended model of cumulative growth inwhich the effects of innovation and catching-up are considered.Innovation adds another source of cumulative growth to thatof traditional models and allows a consideration of the importanceof non-price determinants of international competitiveness.Catching-up is the major force leading to convergence in productivityowing to the effect of the diffusion of technology. The modelallows one to analyse whether cumulative forces may lead tostable growth and whether this solution generates convergencein productivity levels. The structural model is tested for aset of OECD countries over the period 1965–94.     

Convergence in OECD countries: technical change,efficiency and productivity

The aim of this study is to analyse labour productivity convergence in the OECD countries over the period 1975-90. A nonparametric frontier approach is used to calculate the Malmquist productivity index. By breaking it down, the contribution in the growth of labour productivity of technical progress, of changes in efficiency, and of the accumulation of inputs per worker are quantified. Unlike other studies, the results obtained show that technical change has worked against labour productivity convergence, since it has always been greater in the countries with higher labour productivity.     

The effect of female and male schooling on economic growth in the Barro-Lee model

Barro and Lee (1994), in an influential empirical study of the determinants of economic growth, find that, whereas growth is positively related to male schooling, it is negatively related to female schooling. Stokey (1994) has suggested that this is largely due to the influence of four Asian countries (Hong Kong, Singapore, Taiwan and Korea) that have very high levels of growth but very low levels of female schooling, and that deleting the female education variable would cast doubt on the statistical significance of the male education variable. Deletion diagnostics and partial scatter plots are analysed to identify influential observations. The sensitivity of the Barro-Lee results to deleting selected countries from the sample and deleting female education from their growth equations is then examined. The results obtained point to the fragile nature of both the significant negative effect of female education and the significant positive effect of male education in the Barro-Lee model. First version received: September 1996/Final version received: December 1998     

Convergence: International comparisons based on a simultaneous equation model with regional effects

A structural model incorporating regional effects is fitted to cross-sectional data for 60 countries. The model integrates various strands in the literature, including the dynamic Verdoorn Law linking productivity growth to output growth, and relationships between educational attainment, trade and innovativeness. Most notably, the structural model supports the thesis that a country's innovativeness and, consequently, capital stock growth, depend on the level of technology in the 'surrounding' region.The approach adopted is set within the context of the theoretical and empirical analysis of increasing returns and cumulative causation. However, the resulting parameter estimates lead to a reduced form that implies convergence to an equilibrium rather than divergent productivity levels. The equilibrium productivity level ratios (vis-à-vis the USA) indicate that countries are converging on different levels, although a group does attain the USA productivity level.