Human Capital and Growth: Specification Matters

Uwe Sunde and Thomas Vischer ()
Additional contact information
Thomas Vischer: University of Munich

No 5991, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper suggests that the weak empirical effect of human capital on growth in existing cross-country studies is partly the result of an inappropriate specification that does not account for the different channels through which human capital affects growth. A systematic replication of earlier results from the literature shows that both, initial levels and changes in human capital, have positive growth effects, while in isolation, each channel often appears insignificant. Moreover, the effects are heterogeneous across countries with different levels of development. The results suggest that the effect of human capital is likely to be underestimated in empirical specifications that do not account for both channels. This study therefore complements alternative explanations for the weak growth effects of human capital based on outlier observations and measurement issues.

Keywords: specification; growth regressions; human capital (search for similar items in EconPapers)
JEL-codes: E24 O11 O15 O47 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2011-09
New Economics Papers: this item is included in nep-dev, nep-fdg, nep-hrm and nep-lab
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Citations: View citations in EconPapers (13)

Published - revised version published in: Economica, 2015, 82(326), 368–390

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https://docs.iza.org/dp5991.pdf (application/pdf)

Related works:
Journal Article: Human Capital and Growth: Specification Matters (2015)
Working Paper: Human Capital and Growth: Specification Matters (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp5991

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