IDEAS home Printed from https://ideas.repec.org/a/eee/jmacro/v77y2023ics0164070423000423.html
   My bibliography  Save this article

Misallocation of talent, teachers’ human capital, and development in Brazil

Author

Listed:
  • Barros, Fernando
  • Delalibera, Bruno R.
  • Nakabashi, Luciano
  • Ribeiro, Marcos J.

Abstract

In this study, we investigate the allocation of talent in an economy where teachers play a critical role in developing the human capital of the workforce. To this end, we formulate a Roy model with externality in the occupational choice, as the quantity and quality of teachers are key determinants of workers’ human capital. Our analysis suggests that when individuals with greater abilities opt for teaching careers, the entire workforce benefits. However, frictions in the labor and educational goods markets may lead to a suboptimal allocation of talent and hinder economic growth and development. Our model is calibrated to the Brazilian economy, and our findings reveal a negative correlation between frictions in the teacher’s occupation and per capita output in the Brazilian states. Our results indicate that eliminating friction in the labor market could result in a 16.94% increase in Brazilian income.

Suggested Citation

  • Barros, Fernando & Delalibera, Bruno R. & Nakabashi, Luciano & Ribeiro, Marcos J., 2023. "Misallocation of talent, teachers’ human capital, and development in Brazil," Journal of Macroeconomics, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:jmacro:v:77:y:2023:i:c:s0164070423000423
    DOI: 10.1016/j.jmacro.2023.103542
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0164070423000423
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jmacro.2023.103542?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Naijia Guo & Charles Ka Yui Leung, 2021. "Do elite colleges matter? The impact on entrepreneurship decisions and career dynamics," Quantitative Economics, Econometric Society, vol. 12(4), pages 1347-1397, November.
    2. Marco Cagetti & Mariacristina De Nardi, 2006. "Entrepreneurship, Frictions, and Wealth," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 835-870, October.
    3. Steven G. Rivkin & Eric A. Hanushek & John F. Kain, 2005. "Teachers, Schools, and Academic Achievement," Econometrica, Econometric Society, vol. 73(2), pages 417-458, March.
    4. Menezes-Filho, Naercio & Pazello, Elaine, 2007. "Do teachers' wages matter for proficiency? Evidence from a funding reform in Brazil," Economics of Education Review, Elsevier, vol. 26(6), pages 660-672, December.
    5. Gilpin, Gregory & Kaganovich, Michael, 2012. "The quantity and quality of teachers: Dynamics of the trade-off," Journal of Public Economics, Elsevier, vol. 96(3), pages 417-429.
    6. Benhabib, Jess & Spiegel, Mark M., 2005. "Human Capital and Technology Diffusion," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 13, pages 935-966, Elsevier.
    7. Diego Restuccia & Richard Rogerson, 2017. "The Causes and Costs of Misallocation," Journal of Economic Perspectives, American Economic Association, vol. 31(3), pages 151-174, Summer.
    8. Brotherhood, Luiz & Delalibera, Bruno R., 2020. "Minding the gap between schools and universities," Journal of Economic Dynamics and Control, Elsevier, vol. 120(C).
    9. David Card & Alan B. Krueger, 1992. "School Quality and Black-White Relative Earnings: A Direct Assessment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 151-200.
    10. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    11. Viktoria Hnatkovska & Amartya Lahiri & Sourabh Paul, 2012. "Castes and Labor Mobility," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 274-307, April.
    12. Marigee P. Bacolod, 2007. "Do Alternative Opportunities Matter? The Role of Female Labor Markets in the Decline of Teacher Quality," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 737-751, November.
    13. Ludger Woessmann, 2016. "The Importance of School Systems: Evidence from International Differences in Student Achievement," Journal of Economic Perspectives, American Economic Association, vol. 30(3), pages 3-32, Summer.
    14. Eckstein, Zvi & Zilcha, Itzhak, 1994. "The effects of compulsory schooling on growth, income distribution and welfare," Journal of Public Economics, Elsevier, vol. 54(3), pages 339-359, July.
    15. Fernando A Barros Jr & Bruno R Delalilbera, 2018. "Market frictions, misallocation of talent and development," Economics Bulletin, AccessEcon, vol. 38(4), pages 2410-2430.
    16. Vladimir Ponczek & Andre Portela Souza, 2012. "New Evidence of the Causal Effect of Family Size on Child Quality in a Developing Country," Journal of Human Resources, University of Wisconsin Press, vol. 47(1), pages 64-106.
    17. Eric A. Hanushek & Charles Ka Yui Leung & Kuzey Yilmaz, 2014. "Borrowing Constraints, College Aid, and Intergenerational Mobility," Journal of Human Capital, University of Chicago Press, vol. 8(1), pages 1-41.
    18. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
    19. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    20. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    21. Eric A. Hanushek & Marc Piopiunik & Simon Wiederhold, 2019. "The Value of Smarter Teachers: International Evidence on Teacher Cognitive Skills and Student Performance," Journal of Human Resources, University of Wisconsin Press, vol. 54(4), pages 857-899.
    22. Rodrigo R. Soares & Diana Kruger & Matias Berthelon, 2012. "Household Choices of Child Labor and Schooling: A Simple Model with Application to Brazil," Journal of Human Resources, University of Wisconsin Press, vol. 47(1), pages 1-31.
    23. Afonso Ferreira, 2000. "Convergence in Brazil: recent trends and long-run prospects," Applied Economics, Taylor & Francis Journals, vol. 32(4), pages 479-489.
    24. Luis Franjo & Nathalie Pouokam & Francesco Turino, 2022. "Financial Frictions and Firm Informality: A General Equilibrium Perspective," The Economic Journal, Royal Economic Society, vol. 132(645), pages 1790-1823.
    25. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    26. Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
    27. Delalibera, Bruno Ricardo & Ferreira, Pedro Cavalcanti, 2019. "Early childhood education and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 98(C), pages 82-104.
    28. Machado, Laura Muller & Scorzafave, Luiz Guilherme Dácar da Silva, 2016. "Distribuição de salários de professores e outras ocupações: uma análise para graduados em carreiras tipicamente ligadas à docência," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 70(2), July.
    29. Hatsor, Limor, 2012. "Occupational choice: Teacher quality versus teacher quantity," Labour Economics, Elsevier, vol. 19(4), pages 608-623.
    30. Hanushek, Eric A. & Woessmann, Ludger, 2012. "Schooling, educational achievement, and the Latin American growth puzzle," Journal of Development Economics, Elsevier, vol. 99(2), pages 497-512.
    31. Stoddard, Christiana, 2003. "Why has the number of teachers per student risen while teacher quality has declined?: The role of changes in the labor market for women," Journal of Urban Economics, Elsevier, vol. 53(3), pages 458-481, May.
    32. Chang‐Tai Hsieh & Erik Hurst & Charles I. Jones & Peter J. Klenow, 2019. "The Allocation of Talent and U.S. Economic Growth," Econometrica, Econometric Society, vol. 87(5), pages 1439-1474, September.
    33. Robert Tamura, 2001. "Teachers, Growth, and Convergence," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 1021-1059, October.
    34. Banerjee, Abhijit V. & Duflo, Esther, 2005. "Growth Theory through the Lens of Development Economics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 7, pages 473-552, Elsevier.
    35. Abdulla, Kanat, 2019. "Productivity gains from reallocation of talent in Brazil and India," Journal of Macroeconomics, Elsevier, vol. 62(C).
    36. Lakdawalla, Darius, 2006. "The Economics of Teacher Quality," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 285-329, April.
    37. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tuanbiao Jiang & Min Zhong & Anrong Gao & Guoqun Ma, 2024. "Do Factor Misallocations Affect Food Security? Evidence from China," Agriculture, MDPI, vol. 14(5), pages 1-17, May.
    2. Gnangnon, Sèna Kimm, 2023. "Export Product Quality and Inclusivity in Developing Countries," EconStor Preprints 274651, ZBW - Leibniz Information Centre for Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sampreet Singh Goraya, 2019. "How does Caste Affect Entrepreneurship? Birth vs Worth," Working Papers 1104, Barcelona School of Economics.
    2. Hatsor, Limor, 2012. "Occupational choice: Teacher quality versus teacher quantity," Labour Economics, Elsevier, vol. 19(4), pages 608-623.
    3. Gilpin, Gregory & Kaganovich, Michael, 2012. "The quantity and quality of teachers: Dynamics of the trade-off," Journal of Public Economics, Elsevier, vol. 96(3), pages 417-429.
    4. Limor Hatsor, 2014. "Allocation of Resources in Educational Production: The Budget Puzzle," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(6), pages 854-883, December.
    5. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    6. Goraya, Sampreet Singh, 2023. "How does caste affect entrepreneurship? birth versus worth," Journal of Monetary Economics, Elsevier, vol. 135(C), pages 116-133.
    7. Gilpin, Gregory & Kaganovich, Michael, 2012. "The quantity and quality of teachers: Dynamics of the trade-off," Journal of Public Economics, Elsevier, vol. 96(3), pages 417-429.
    8. Chen, Binkai & Lin, Justin Yifu, 2021. "Development strategy, resource misallocation and economic performance," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 612-634.
    9. Diego Restuccia & Richard Rogerson, 2017. "The Causes and Costs of Misallocation," Journal of Economic Perspectives, American Economic Association, vol. 31(3), pages 151-174, Summer.
    10. Eric A. Hanushek & Jens Ruhose & Ludger Woessmann, 2017. "Knowledge Capital and Aggregate Income Differences: Development Accounting for US States," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 184-224, October.
    11. Gregory Gilpin & Michael Kaganovich, 2009. "The Quantity and Quality of Teachers: A Dynamic Trade-off," CESifo Working Paper Series 2516, CESifo.
    12. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    13. Young Eun Kim & Norman V. Loayza, 2019. "Productivity Growth: Patterns and Determinants across the World," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 36-93.
    14. Tamura, Robert & Dwyer, Jerry & Devereux, John & Baier, Scott, 2019. "Economic growth in the long run," Journal of Development Economics, Elsevier, vol. 137(C), pages 1-35.
    15. Zheng Li & Jorge Martinez-Vazquez, 2018. "Fiscal Decentralization and Interregional Capital Misallocation: Evidence from China," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1816, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    16. Yao, Yao, 2016. "Higher education expansion, economic reform and labor productivity," Working Paper Series 19506, Victoria University of Wellington, School of Economics and Finance.
    17. Kumari, Ranpati Dewage Thilini Sumudu & Chen, Shawn Xiaoguang & Li, Bei & Tang, Sam Hak Kan, 2023. "Can land misallocation be a greater barrier to development than capital? Evidence from manufacturing firms in Sri Lanka," Economic Modelling, Elsevier, vol. 126(C).
    18. Yao, Yao, 2016. "Higher education expansion, economic reform and labor productivity," Working Paper Series 5357, Victoria University of Wellington, School of Economics and Finance.
    19. Yao, Yao, 2019. "Does higher education expansion enhance productivity?," Journal of Macroeconomics, Elsevier, vol. 59(C), pages 169-194.
    20. Artige, Lionel & Cavenaile, Laurent, 2023. "Public education expenditures, growth and income inequality," Journal of Economic Theory, Elsevier, vol. 209(C).

    More about this item

    Keywords

    Misallocation; Human capital; Labor; Externalities; Growth;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jmacro:v:77:y:2023:i:c:s0164070423000423. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622617 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.