IDEAS home Printed from https://ideas.repec.org/p/zbw/rwidps/30.html
   My bibliography  Save this paper

Human Capital and Economic Growth in OECD Countries

Author

Listed:
  • Middendorf, Torge

Abstract

The results of the PISA 2000 study renewed the interest in the contribution of human capital to economic growth. So far the exploration of large country comparisons delivered rather mixed results. Concentrating on those OECD member countries which participated in PISA 2000, this paper uses panel data estimation techniques to refine this analysis. Estimation results reveal a positive impact of the human capital stock on economic growth suggesting that an increase in the average schooling years by one year yields a rise in the GDP growth rate of about 0.5 percentage points. However, when taking possible endogeneity into account in an instrumental variables approach, these conclusions on the impact of the level of human capital on economic growth is demonstrated to be rather fragile.

Suggested Citation

  • Middendorf, Torge, 2005. "Human Capital and Economic Growth in OECD Countries," RWI Discussion Papers 30, RWI - Leibniz-Institut für Wirtschaftsforschung.
    • Handle: RePEc:zbw:rwidps:30
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/18581/1/DP_05_030.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2,4-6.
    3. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," The World Bank Economic Review, World Bank, vol. 11(2), pages 357-382, May.
    4. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
    5. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    6. Jonathan Temple, 2003. "Growth effects of education and social capital in the OECD countries," OECD Economic Studies, OECD Publishing, vol. 2001(2), pages 57-101.
    7. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    8. Angel de la Fuente & Rafael Doménech, 2006. "Human Capital in Growth Regressions: How Much Difference Does Data Quality Make?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 1-36, March.
    9. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," The World Bank Economic Review, World Bank, vol. 10(3), pages 565-591, September.
    10. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    11. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo.
    12. Barbara Sianesi & John Van Reenen, 2003. "The Returns to Education: Macroeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 157-200, April.
    13. Ben S. Bernanke & Julio J. Rotemberg (ed.), 1997. "NBER Macroeconomics Annual 1997," MIT Press Books, The MIT Press, edition 1, volume 1, number 026252242x, April.
    14. Topel, Robert, 1999. "Labor markets and economic growth," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 44, pages 2943-2984, Elsevier.
    15. Angel de la Fuente & Rafael Dom?ech, 2002. "Human capital in growth regressions: how much difference does data quality make? An update and further results," UFAE and IAE Working Papers 537.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    16. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-563, July.
    17. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    18. 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.
    19. Jeremy B. Rudd, 2000. "Empirical evidence on human capital spillovers," Finance and Economics Discussion Series 2000-46, Board of Governors of the Federal Reserve System (U.S.).
    20. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    21. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    22. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    23. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
    24. Ludger Wößmann, 2003. "Specifying Human Capital," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 239-270, July.
    25. Jerik Hanushek & Dennis Kimko, 2006. "Schooling, Labor-force Quality, and the Growth of Nations," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 1, pages 154-193.
    26. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
    27. Amparo Castello & Rafael Domenech, 2002. "Human Capital Inequality and Economic Growth: Some New Evidence," Economic Journal, Royal Economic Society, vol. 112(478), pages 187-200, March.
    28. Pritchett, Lant, 1996. "Where has all the education gone?," Policy Research Working Paper Series 1581, The World Bank.
    29. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-389, September.
    30. Gemmell, Norman, 1996. "Evaluating the Impacts of Human Capital Stocks and Accumulation on Economic Growth: Some New Evidence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(1), pages 9-28, February.
    31. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    32. Mark Bils & Peter J. Klenow, 1998. "Does Schooling Cause Growth or the Other Way Around?," NBER Working Papers 6393, National Bureau of Economic Research, Inc.
    33. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
    34. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    35. Romer, Paul M., 1990. "Human capital and growth: Theory and evidence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 32(1), pages 251-286, January.
    36. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
    37. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    38. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    39. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    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. Muhammad Shahid & Amjad Ali, 2015. "The Impact of Decentralized Economic Affairs Expenditures on Economic Growth: A Time Series Analysis of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 4(3), pages 136-148, September.
    2. Hwan-Joo Seo & Young Soo Lee & Jai-Joon Hur & Jin Ki Kim, 2012. "The impact of information and communication technology on skilled labor and organization types," Information Systems Frontiers, Springer, vol. 14(2), pages 445-455, April.
    3. Valerien O. Pede & Raymond J. G. M. Florax & Henri L. F. de Groot & Gustavo Barboza, 2021. "Technological leadership and sectorial employment growth: A spatial econometric analysis for U.S. counties," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 50(1), February.
    4. Middendorf, Torge, 2008. "Returns to Education in Europe – Detailed Results from a Harmonized Survey," Ruhr Economic Papers 65, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Sieng, Lai Wei & Yussof, Ishak, 2014. "Human Capital Accumulation and Economic Growth in Malaysia - Investigating the Long Run Nexus," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 48(1), pages 155-165.
    6. Kevin Pugh & Gigi Foster, 2014. "Australia's National School Data and the ‘Big Data’ Revolution in Education Economics," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 47(2), pages 258-268, June.
    7. repec:zbw:rwirep:0065 is not listed on IDEAS
    8. Nikos Benos & Stelios Karagiannis, 2010. "The Role of Human Capital in Economic Growth: Evidence from Greek Regions," Chapters, in: Neri Salvadori (ed.), Institutional and Social Dynamics of Growth and Distribution, chapter 7, Edward Elgar Publishing.
    9. Faisal Sultan Qadri & Abdul Waheed, 2013. "Human capital and economic growth: Cross-country evidence from low-, middle- and high-income countries," Progress in Development Studies, , vol. 13(2), pages 89-104, April.
    10. Mihut Ioana & Luțas Mihaela, 2014. "Sustainable Growth: Recent Trends Across Central And Eastern European Economies," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 175-186, July.
    11. Arvanitis, Spyros & Loukis, Euripidis N., 2009. "Information and communication technologies, human capital, workplace organization and labour productivity: A comparative study based on firm-level data for Greece and Switzerland," Information Economics and Policy, Elsevier, vol. 21(1), pages 43-61, February.
    12. Torge Middendorf, 2008. "Returns to Education in Europe – Detailed Results from a Harmonized Survey," Ruhr Economic Papers 0065, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    13. Marinko Škare & Sabina Lacmanovic, 2015. "Human capital and economic growth: a review essay," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(39), pages 735-735, May.

    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. repec:zbw:rwidps:0030 is not listed on IDEAS
    2. Torge Midendorf, 2005. "Human Capital and Economic Growth in OECD Countries," RWI Discussion Papers 0030, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    3. Wößmann, Ludger, 2000. "Specifying Human Capital: A Review, Some Extensions, and Development Effects," Kiel Working Papers 1007, Kiel Institute for the World Economy (IfW Kiel).
    4. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    5. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    6. Marta Simões, 2004. "The Education-growth Nexus Across OECD Countries: Schooling Levels and Parameter Heterogeneity," DEGIT Conference Papers c009_029, DEGIT, Dynamics, Economic Growth, and International Trade.
    7. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    8. Conrad, Daren, 2017. "Education's Contribution to Economic Growth," MPRA Paper 77365, University Library of Munich, Germany.
    9. ?gel de la Fuente, "undated". "Convergence Across Countries And Regions: Theory And Empirics," UFAE and IAE Working Papers 447.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    10. Indunil De Silva & Sudarno Sumarto, 2015. "Dynamics Of Growth, Poverty And Human Capital: Evidence From Indonesian Sub-National Data," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 40(2), pages 1-33, June.
    11. Marcelo Soto, 2006. "The Causal Effect of Education on Aggregate Income," Working Papers 0605, International Economics Institute, University of Valencia.
    12. Antonio Ciccone & Elias Papaioannou, 2009. "Human Capital, the Structure of Production, and Growth," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 66-82, February.
    13. Bahar Bayraktar-Sağlam, 2016. "The Stages of Human Capital and Economic Growth: Does the Direction of Causality Matter for the Rich and the Poor?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(1), pages 243-302, May.
    14. Sumarto, Sudarno & De Silva, Indunil, 2014. "Being Healthy, Wealthy, and Wise: Dynamics of Indonesian Subnational Growth and Poverty," MPRA Paper 57824, University Library of Munich, Germany.
    15. Hüseyin Sen & Ayse Kaya & Baris Alpaslan, 2015. "Education, Health, and Economic Growth Nexus: A Bootstrap Panel Granger Causality Analysis for Developing Countries," Economics Discussion Paper Series 1502, Economics, The University of Manchester.
    16. Måns Söderbom & Francis Teal, 2003. "Openness and human capital as sources of productivity growth: An empirical investigation," CSAE Working Paper Series 2003-06, Centre for the Study of African Economies, University of Oxford.
    17. Daren, Conrad, 2007. "Education and Economic Growth: Is There a Link?," MPRA Paper 18176, University Library of Munich, Germany, revised 2009.
    18. Bos, J.W.B. & Economidou, C. & Koetter, M. & Kolari, J.W., 2010. "Do all countries grow alike?," Journal of Development Economics, Elsevier, vol. 91(1), pages 113-127, January.
    19. Baldacci, Emanuele & Clements, Benedict & Gupta, Sanjeev & Cui, Qiang, 2008. "Social Spending, Human Capital, and Growth in Developing Countries," World Development, Elsevier, vol. 36(8), pages 1317-1341, August.
    20. Robert W. Arnold, 2003. "Modeling Long-Run Economic Growth: Technical Paper 2003-04," Working Papers 14497, Congressional Budget Office.
    21. Les OXxley & Ttrinh Le & John Gibson, 2008. "Measuring Human Capital: Alternative Methods and International Evidence," Korean Economic Review, Korean Economic Association, vol. 24, pages 283-344.

    More about this item

    Keywords

    Human capital accumulation; Convergence; Fixed-effects estimation; Instrumental variable estimation;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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:zbw:rwidps:30. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/rwiesde.html .

    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.