Measurement Error in Education and Growth Regressions* |
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Authors: | Miguel Portela Rob Alessie Coen Teulings |
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Abstract: | The use of the perpetual inventory method for the construction of education data per country leads to systematic measurement error. This paper analyzes its effect on growth regressions. We suggest a methodology for correcting this error. The standard attenuation bias suggests that using these corrected data would lead to a higher coefficient. Our regressions reveal the opposite. We discuss why this is the case. |
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Keywords: | Growth regressions education perpetual inventory method systematic measurement error I2 O4 |
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