Elite Education, Mass Education, and the Transition to Modern Growth

cege Discussion Paper Number 205 – April 2014

40 Pages Posted: 26 Apr 2014

See all articles by Holger Strulik

Holger Strulik

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences

Katharina Werner

University of Goettingen (Göttingen) - Department of Economics

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Date Written: April 24, 2014

Abstract

For most of human history there existed a well-educated and innovative elite whereas mass education, market R&D, and high growth are phenomena of the modern period. In order to explain these phenomena we propose an innovation-driven growth model for the very long run in which the individual-specific return to education is conceptualized as an compound of cognitive ability and family background. This allows us to establish a locally stable steady state at which family background determines whether an individual experiences education and a locally stable steady state at which education is determined by cognitive ability. Compulsory schooling can move society from elite education to mass education. An interaction between education and life expectancy explains why the education period gets longer with ongoing economic development. Embedding this household behavior into a macro-economy we can explain different paths to modern growth: According to the Prussian way, compulsory education is implemented first and triggers later on the onset of market R&D and modern growth. According to the British way, market R&D and the take off to growth is initiated without mass education, which is triggered later by technical progress and economic development.

Keywords: long-run growth; elite education; compulsory education; longevity; R&D.

JEL Classification: I24; J24; O30; O40

Suggested Citation

Strulik, Holger and Werner, Katharina, Elite Education, Mass Education, and the Transition to Modern Growth (April 24, 2014). cege Discussion Paper Number 205 – April 2014, Available at SSRN: https://ssrn.com/abstract=2428846 or http://dx.doi.org/10.2139/ssrn.2428846

Holger Strulik (Contact Author)

University of Goettingen (Göttingen) - School of Law, Economics, Social Sciences ( email )

Germany

Katharina Werner

University of Goettingen (Göttingen) - Department of Economics ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany

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