Teulings, C. N. and Van Rens, Thijs (2008) Education, growth, and income inequality. Review of Economics and Statistics, Volume 90 (Number 1). pp. 89-104. doi:10.1162/rest.90.1.89

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Abstract

Estimates of the effect of education on GDP (the social return) have been hard to reconcile with micro evidence on the private return to schooling. We present a simple explanation combining two ideas: imperfect substitution and endogenous skill-biased technological progress and use cross-country panel data on inequality and GDP to test these ideas. A one-year increase in the level of education reduces the private return by 2 percentage points, consistent with Katz-Murphy's (1992) elasticity of substitution. We find no evidence for reversal of this initial effect as in Acemoglu (2002). In the short run, the social return equals the private return.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Economic development -- Effect of education on, Equality
Journal or Publication Title:	Review of Economics and Statistics
Publisher:	MIT Press
ISSN:	0034-6535
Official Date:	1 February 2008
Dates:	Date Event 1 February 2008 Published 26 September 2006 Accepted 8 March 2004 Submitted
Volume:	Volume 90
Number:	Number 1
Page Range:	pp. 89-104
DOI:	10.1162/rest.90.1.89
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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