Please use this identifier to cite or link to this item: http://arks.princeton.edu/ark:/88435/dsp01s7526c41b
 Title: Education for Growth in Sweden and the World Authors: Krueger, Alan B.Lindahl, Mikael Keywords: educationgrowth Issue Date: 1-Dec-1998 Citation: Swedish Economic Policy Review, vol. 6, no. 2, Autumn 1999. Series/Report no.: Working Papers (Princeton University. Industrial Relations Section) ; 411 Abstract: This paper tries to reconcile evidence on the effect of schooling on income and on GDP growth from the microeconometric and empirical macro growth literatures. Much microeconometric evidence suggests that education is an important causal determinant of income for individuals within countries as diverse as Sweden and the United States. At a national level, however, recent studies have found that increases in educational attainment are unrelated to economic growth. This ﬁnding is shown to be a spurious result of the extremely high rate of measurement error in ﬁrst-differenced cross-country education data. Aﬁer accounting for measurement error, the effect of changes in educational attainment on income growth in cross-country data is at least as great as microeconometric estimates of the rate of return to years of schooling. We also investigate another ﬁnding of the macro growth literature -- that economic growth depends positively on the initial stock of human capital. We ﬁnd that the effect of the initial level of education on growth is sensitive to the econometric assumptions that are imposed on the data (e.g., constant-coefficient assumption), as well as to the other covariates included in the model. Perhaps most importantly, we ﬁnd that the initial level of education does not appear to have a signiﬁcant effect on economic growth among OECD countries. The conclusion comments on policy implications for Sweden based on the human capital literature. URI: http://arks.princeton.edu/ark:/88435/dsp01s7526c41b Appears in Collections: IRS Working Papers

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