Measurement Error in Education and Growth Regressions

22 Pages Posted: 4 Aug 2010

See all articles by Miguel Portela

Miguel Portela

University of Minho; IZA Institute of Labor Economics

Rob J. M. Alessie

University of Groningen; Netspar; Tilburg University - Center for Economic Research (CentER)

Coen N. Teulings

Tinbergen Institute

Multiple version iconThere are 3 versions of this paper

Date Written: 2009-10

Abstract

The use of the perpetual inventory method for the construction of education data per country leads to systematic measurement error. This paper analyzes its effect on growth regressions. We suggest a methodology for correcting this error. The standard attenuation bias suggests that using these corrected data would lead to a higher coefficient. Our regressions reveal the opposite. We discuss why this is the case.

Suggested Citation

Portela, Miguel and Alessie, Rob J. M. and Teulings, Coen N., Measurement Error in Education and Growth Regressions (2009-10). Scandinavian Journal of Economics, Vol. 112, Issue 3, pp. 618-639, September 2010. Available at SSRN: https://ssrn.com/abstract=1653059 or http://dx.doi.org/10.1111/j.1467-9442.2010.01613.x

Miguel Portela (Contact Author)

University of Minho ( email )

Braga, 4700
Portugal

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Rob J. M. Alessie

University of Groningen ( email )

P.O. box 800
9700 AV Groningen
Netherlands
050-3637240 (Phone)

HOME PAGE: http://members.chello.nl/~r.j.m.alessie

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.netspar.nl

Tilburg University - Center for Economic Research (CentER)

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Coen N. Teulings

Tinbergen Institute ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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