World Total Factor Productivity Growth and the Steady-State Rate in the 20th Century

I estimate a Solow model augmented with human capital in 42 countries for 1910-2000. Estimated TFP growth is 0.3%/year, and the steady-state rate for GDP/capita is 1.0%/year. Implicitly for high-income countries maintaining growth above this rate will be increasingly difficult

Higher Test Scores or More Schooling? Another Look at the Causes of Economic Growth

I use a dynamic augmented Solow model to estimate the effects of students’ test scores and investment in schooling on economic growth rates in 49 countries during 1985-2005. In the complete data set, either average test scores or investment in schooling explain economic growth rates, and more of either causes growth. Further analysis reveals that higher test scores only raised growth rates in countries with low average levels of schooling. In countries with more than 7.5 years of schooling attainment in 1985, more investment in schooling raised growth rates, but higher average test scores did not

Increases in human capital and growth: new data, more conclusive results.

Using a new data set for human capital/adult, I show that changes in human capital cause economic growth in 56 countries over the 1985 to 2005 period. I show that these results are superior to results using average schooling attainment.Using a new data set for human capital/adult, I show that changes in human capital cause economic growth in 56 countries over the 1985 to 2005 period. I show that these results are superior to results using average schooling attainment.Using a new data set for human capital/adult, I show that changes in human capital cause economic growth in 56 countries over the 1985 to 2005 period. I show that these results are superior to results using average schooling attainment

A Revision to the Theory and the Practice of Development Accounting

Los profesionales de la contabilidad del desarrollo asumen que el rendimiento privado de la educación es igual a su producto marginal social. Se Muestra que este supuesto es incompatible con la estructura matemática de una función multiplicativa de producción, que especifica que el rendimiento privado es sólo una fracción del producto marginal social. A continuación, se muestra que los resultados empíricos de la contabilidad del desarrollo en la literatura subestiman considerablemente la contribución del capital humano para la producción nacional y sobreestiman las diferencias de productividad nacional.Practitioners of development accounting assume that the private return on schooling equals its social marginal product. I show that this assumption is inconsistent with the mathematical structure of a multiplicative production function, which specifies that the private return is only a fraction of the social marginal product. I then show that the empirical results from development accounting in the literature substantially underestimate human capital’s contribution to national output and overestimate national productivity differences

Cognitive Skills, Schooling Attainment, and Schooling Resources: What Drives Economic Growth?

This paper presents evidence that students’ test scores at ages 9 to 15 are not a good proxy for a nation’s stock of human capital. Across countries test scores rise with increases in human capital up to $40,000/adult (2000$), but then decline as human capital increases up to $125,000/adult. Schooling attainment is a better proxy for the human capital stock than test scores, but it is not very useful for statistical analysis because it is not a precise measure. The nation’s stock of human capital, calculated from cumulative investment in schooling, is the schooling measure most correlated with national income.This paper presents evidence that students’ test scores at ages 9 to 15 are not a good proxy for a nation’s stock of human capital. Across countries test scores rise with increases in human capital up to$40,000/adult (2000$), but then decline as human capital increases up to$125,000/adult. Schooling attainment is a better proxy for the human capital stock than test scores, but it is not very useful for statistical analysis because it is not a precise measure. The nation’s stock of human capital, calculated from cumulative investment in schooling, is the schooling measure most correlated with national income

Evidence that class size matters in 4th grade mathematics an analysis of TIMSS 2007 data for Colombia.

Like students in most developing countries, Colombian students in 4th grade performed poorly in the TIMSS 2007 test of mathematics skills, achieving an average score of 355 relative to an international mean of 500. After controlling for other factors and misreporting error, I find that large classes have substantial adverse effects on student achievement. Increases in class size from 20 to 53 students reduce test scores by about 80 points, or 2.4 points for each additional student in the class. Most likely this is the cumulative effect of class size in grades one to four on achievement in 4th grade.Like students in most developing countries, Colombian students in 4th grade performed poorly in the TIMSS 2007 test of mathematics skills, achieving an average score of 355 relative to an international mean of 500. After controlling for other factors and misreporting error, I find that large classes have substantial adverse effects on student achievement. Increases in class size from 20 to 53 students reduce test scores by about 80 points, or 2.4 points for each additional student in the class. Most likely this is the cumulative effect of class size in grades one to four on achievement in 4th grade

Penn world table 7.0: are the data flawed?

Penn World Table (PWT) 7.0 is the newest PWT data set, based in part on benchmarked prices collected in 2005. In theory the data in PWT 7.0 should be more accurate than the data in PWT 6.3 since 1996 and similar in earlier years. I show that PWT 7.0 GDP/capita and price data for 1970 to 1996 deviate substantially from prior PWT data that are benchmarked to prices across countries for those years. I conclude that overall the PWT 7.0 data are much less accurate than the data in PWT 6.2 and 6.3.Penn World Table (PWT) 7.0 is the newest PWT data set, based in part on benchmarked prices collected in 2005. In theory the data in PWT 7.0 should be more accurate than the data in PWT 6.3 since 1996 and similar in earlier years. I show that PWT 7.0 GDP/capita and price data for 1970 to 1996 deviate substantially from prior PWT data that are benchmarked to prices across countries for those years. I conclude that overall the PWT 7.0 data are much less accurate than the data in PWT 6.2 and 6.3

Changes in the Effect of Capital and TFP on Output in Penn World Tables 7 and 8: Improvement or Error?

Lower ICP 2005 construction prices in developing countries increase the effect of capital on output in PWT 7.1 and 8.0 and cause negative world TFP growth during 1990-2010 in PWT 8.0. The investment data appear to be more accurate in PWT 6.3

The role of cognitive skills in economic development revisited.

Students’ test scores at ages 9 to 15 are a measure of their skills as workers five to 55 years later. Using historic data on test scores and school attendance, I calculate the share of workers in 2005 that could have scored above 400 and above 600 in 45 countries. I find that the share above 400 and average schooling attainment cause national income, while the share above 600 and the share with post-secondary schooling do not. Implicitly the best long-term development strategy for poor countries is to increase the share of students who complete primary and secondary schooling.Students’ test scores at ages 9 to 15 are a measure of their skills as workers five to 55 years later. Using historic data on test scores and school attendance, I calculate the share of workers in 2005 that could have scored above 400 and above 600 in 45 countries. I find that the share above 400 and average schooling attainment cause national income, while the share above 600 and the share with post-secondary schooling do not. Implicitly the best long-term development strategy for poor countries is to increase the share of students who complete primary and secondary schooling

The role of education in economic growtht: theory, history, and current returns.

Evidence is presented that economic development requires both human capital and physical capital and that historically human capital has been the limiting factor in national development. Education has direct and indirect effects on national income. Evidence is presented that the indirect effects are very large and larger than the direct effects in poor countries. The indirect effects are not very large and are smaller than the direct effects in rich countries. Investment in education has diminishing returns. Macro returns exceed 50 percent in poorly-educated countries and 12 percent in highly-educated countries.Evidence is presented that economic development requires both human capital and physical capital and that historically human capital has been the limiting factor in national development. Education has direct and indirect effects on national income. Evidence is presented that the indirect effects are very large and larger than the direct effects in poor countries. The indirect effects are not very large and are smaller than the direct effects in rich countries. Investment in education has diminishing returns. Macro returns exceed 50 percent in poorly-educated countries and 12 percent in highly-educated countries