Returns to scale in producing human capital from schooling

This study examines a crucial assumption in much of the recentwork on endogenous growth, namely, constant returns to scalein producing human capital. A simple model is constructed toshow that the returns to scale in human capital production canbe inferred from the relationship between the wage rate andyears of schooling. A large international micro dataset is usedto estimate this relationship. The empirical evidence indicatesthat human capital production displays significant increasingreturns at low levels of educational attainment, and significantdecreasing returns at high levels of educational attainment.