Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2002-01-22
Revision-Date: 2003-03-05
Number: 02-001/3
Author-Name: Coen N. Teulings
Author-Email: c.teulings@seo.nl
Author-Workplace-Name: SEO, University of Amsterdam
Author-Name: Thijs van Rens
Author-Email: tvanrens@crei.cat
Author-Workplace-Name: Department of Economics, Princeton University
Title: Education, Growth and Income Inequality
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. <P>This discussion paper has resulted in a publication in the <A href="https://web.ebscohost.com/ehost/detail?vid=3&hid=12&sid=0dc6ecda-75e0-4ccf-ac08-df4f7487bffb%40sessionmgr11&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=29338589"><I>Review of Economics and Statistics</I></A>, 2008, 90(1), 89-104.
Classification-JEL: E20; J24; O10; O15
Keywords: education; inequality; growth
File-Url: https://papers.tinbergen.nl/02001.pdf
File-Format: application/pdf
File-Size: 567046 bytes
Handle: RePEc:tin:wpaper:20020001