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Title: Education, sectoral composition, and growth

Citation Type: Journal Article

Publication Year: 2009

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Abstract: Growth accounting exercises using standard human capital measures are limited in their ability to attribute causal effects and to explain growth. This paper develops a model of growth and schooling consistent with these decompositions but with less unexplained growth. The theory distinguishes between three different sources of education gains: (1) supply shifts, (2) skill-biased technical change increasing demand within industries/occupations, and (3) skill-biased technical change caused by the introduction of new skill-intensive industries/occupations. The third source leads to the large sectoral shifts and the largest growth effects. Quantitatively, schooling contributions account for 24 percent of wage growth, with both the direct (i.e., supply driven) causal contribution of schooling and the indirect causal (i.e., technology induced) contribution playing substantial roles.

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Authors: Kaboski, Joseph P.

Periodical (Full): Review of Economic Dynamics

Issue: 1

Volume: 12

Pages: 168-182

Data Collections: IPUMS USA

Topics: Education, Labor Force and Occupational Structure

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