The Evolution of Education: A Macroeconomic Analysis

36 Pages Posted: 6 Oct 2008

See all articles by Diego Restuccia

Diego Restuccia

University of Toronto - Department of Economics

Guillaume Vandenbroucke

Federal Reserve Banks - Federal Reserve Bank of St. Louis

Multiple version iconThere are 2 versions of this paper

Date Written: October 2008

Abstract

Between 1940 and 2000 there has been a substantial increase of educational attainment in the United States. What caused this trend? We develop a model of schooling decisions in order to assess the quantitative contribution of technological progress in explaining the evolution of education. We use earnings across educational groups and growth in gross domestic product per worker to restrict technological progress. These restrictions imply substantial skill-biased technical change (SBTC). We find that changes in relative earnings through SBTC can explain the bulk of the increase in educational attainment. In particular, a calibrated version of the model generates an increase in average years of schooling of 48 percent compared to 27 percent in the data. This strong effect of changes in relative earnings on educational attainment is robust to relevant variations in the model and is consistent with empirical estimates of the long-run income elasticity of schooling. We also find that the substantial increase in life expectancy observed during the period contributes little to the change in educational attainment in the model.

Keywords: educational attainment, schooling, skill biased technical progress, human capital

JEL Classification: E1, O3, O4

Suggested Citation

Restuccia, Diego and Vandenbroucke, Guillaume, The Evolution of Education: A Macroeconomic Analysis (October 2008). Available at SSRN: https://ssrn.com/abstract=1279467 or http://dx.doi.org/10.2139/ssrn.1279467

Diego Restuccia

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada

Guillaume Vandenbroucke (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of St. Louis ( email )

411 Locust St
Saint Louis, MO 63011
United States
+1 314 444 8717 (Phone)

HOME PAGE: http://www.guillaumevdb.net/

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