Education, growth and income inequality

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Review of Economics and Statistics, Vol. 90 (1), pp. 89-104. February 2008
http://hdl.handle.net/10230/777
To cite or link this document: http://hdl.handle.net/10230/777
dc.contributor.author Teuling, Coen
dc.contributor.author van Rens, Thijs
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.issued 2001-01-01
dc.identifier.citation Review of Economics and Statistics, Vol. 90 (1), pp. 89-104. February 2008
dc.identifier.uri http://hdl.handle.net/10230/777
dc.description.abstract Estimates of the e¤ect of education on GDP (the social return to education)have been hard to reconcile with micro evidence on the private return. We present a simple explanation that combines two ideas: imperfect substitution between worker types and endogenous skill biased technological progress. When types of workers are imperfect substitutes, the supply of human capital is negatively related to its return, and a higher education level compresses wage di¤erentials. We use cross-country panel data on income inequality to estimate the private return and GDP data to estimate the social return. The results show that the private return falls by 2 percentage points when the average education level increases by a year, which is consistent with Katz and Murphy's [1992] estimate of the elasticity of substitution between worker types. We find no evidence for dynamics in the private return, and certainly not for a reversal of the negative e¤ect as described in Acemoglu [2002]. The short run social return equals the private return.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 942
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Education, growth and income inequality
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2014-06-03T07:14:16Z
dc.subject.keyword Macroeconomics and International Economics
dc.subject.keyword growth
dc.subject.keyword inequality
dc.subject.keyword education
dc.subject.keyword private and social return to schooling
dc.subject.keyword compression effect
dc.rights.accessRights info:eu-repo/semantics/openAccess


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