Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85816
Authors: 
Teulings, Coen N.
van Rens, Thijs
Year of Publication: 
2002
Series/Report no.: 
Tinbergen Institute Discussion Paper 02-001/3
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.
Subjects: 
education
inequality
growth
JEL: 
E20
J24
O10
O15
Document Type: 
Working Paper

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