What Level of Education Matters Most for Growth? Evidence from Portugal

Abstract

We decompose annual average years of schooling series for Portugal into different schooling levels series. By estimating a number of vector autoregressions, we provide measures of aggregate and disaggregate economic growth impacts of different education levels. Increasing education at all levels except tertiary have a positive and significant effect on growth. Investment in education does not significantly crowd out physical investment and average years of schooling semi-elasticities have comparable magnitude across primary and secondary levels.

Keywords: Economic impact, Economic development, Human capital, Productivity

JEL Classification: I21, O47, 052