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Micro evidence on human capital as the engine of growth

By Philip A. Trostel

Abstract

This study examines a crucial assumption in much of the recent work on endogenous growth, namely, constant returns to scale in the production of human capital. A simple model is constructed to show that the returns to scale in human capital production can be inferred from the relationship between the wage rate and years of schooling. A large international micro dataset is used to estimate this relationship. The empirical evidence is decisive. There are decreasing returns to scale in human capital production; that is, the micro-level evidence is not supportive of endogenous growth driven by human capital accumulation

Topics: HD
Publisher: University of Warwick, Department of Economics
Year: 2000
OAI identifier: oai:wrap.warwick.ac.uk:1622

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Citations

  1. 0.001 (0.00) Latvia (N=154, w after tax)
  2. 0.003 (0.05) Switzerland (N= 305, w after tax)
  3. 0.007 (0.63) Slovak Republic doi
  4. 0.009 (1.17) Netherlands (N=2108, w after tax)
  5. 0.012 (1.69) t statistics are in parentheses. There are unreported controls for a fourth-order polynomial in potential experience, and for each year.Table 5.2 Individual Country Regression Results
  6. 0.013 (0.86) -0.011 (2.00) Slovenia (N=586, w after tax)
  7. 0.014 (2.56) East Germany (N=1227, w after tax)
  8. 0.021 (0.88) -0.029 (3.39) Czech Republic (N=462, w after tax)
  9. 0.021 (1.44) Italy (N=1297, w after tax)
  10. 0.023 (0.51) -0.051 (2.63) Hungary (N=649, w after tax)
  11. 0.025 (0.76) t statistics are in parentheses. There are unreported controls for a fourth-order polynomial in potential experience, and for each year.Table 6 Dummy-Variable Regression Results
  12. 0.027 (3.15) -0.012 (3.44) United States (N=3231, w before tax)
  13. 0.029 (6.26) -0.018 (1.69) max
  14. 0.031 (6.90) -0.014 (6.47) max
  15. 0.034 (9.00) -0.012 (8.46) max
  16. 0.037 (5.74) -0.016 (6.83) max
  17. 0.043 (5.14) -0.003 (0.75) Austria (N=1730, w after tax)
  18. 0.047 (7.41) -0.008 (4.00) max
  19. 0.049 (3.68) -0.028 (4.78) Australia (N=3017, w before tax)
  20. 0.072 (2.21) 0.002 (0.22) t statistics are in parentheses. There are unreported controls for a fourth-order polynomial in potential experience, and for each year.Table 5.4 Individual Country Regression Results
  21. 0.081 (3.32) -0.011 (1.21) New Zealand (N=1079, w before tax)
  22. 0.144 (3.65) 0.019 (1.26) t statistics are in parentheses. There are unreported controls for a fourth-order polynomial in potential experience, and for each year.Table 5.3 Individual Country Regression Results
  23. 0.736 (6.93) 0.045 (1.39) t statistics are in parentheses. There are unreported controls for a fourthorder polynomial in potential experience, and for each year in each country.
  24. 985 (60.56) t statistics are in parentheses. There are unreported controls for a fourth-order polynomial in potential experience, and for each year in each country.Table 3
  25. (1996). A Microfoundation for Social Increasing Returns in Human Capital Accumulation," Quarterly Journal of Economics, doi
  26. (1996). Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," Review of Economics doi
  27. (1992). Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, doi
  28. Germany (N=3340, w after tax)
  29. t statistics are in parentheses. There are unreported controls for a fourth-order polynomial in potential experience, and for each year in each country.Table 4 Results Over Various Ranges of
  30. t statistics are in parentheses. There are unreported controls for a fourth-order polynomial in potential experience, and for each year in each country.Table 5.1 Individual Country Regression Results

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