Income and Schooling

58 Pages Posted: 26 Feb 2013

See all articles by Markus Brückner

Markus Brückner

National University of Singapore (NUS)

Mark Gradstein

Ben-Gurion University of the Negev - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); World Bank - Development Research Group (DECRG)

Date Written: February 2013

Abstract

Whereas existing literature has documented strong correlations between national incomes and measures of schooling attainment, causality has been hard to pin down. Much of empirical work had tended to interpret these correlations as implying an effect of human capital on national income, but recent calibrated models have argued that most of the link works, in fact, the other way around. In this paper, therefore, we take a close look as to whether income growth causes schooling from an empirical perspective. We do so by focusing on within-country variation and using instrumental variables estimation to extract exogenous variation in countries' national incomes. We detect a significant causal effect of income growth on various measures of schooling attainment, more so in poor countries.

Keywords: national income, schooling attainment

JEL Classification: I2, O4

Suggested Citation

Brückner, Markus and Gradstein, Mark, Income and Schooling (February 2013). CEPR Discussion Paper No. DP9365, Available at SSRN: https://ssrn.com/abstract=2224290

Markus Brückner (Contact Author)

National University of Singapore (NUS) ( email )

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NUHS Tower Block Level 7
119228

Mark Gradstein

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel
+97 2 8647 2288 (Phone)
+97 2 8647 2941 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

World Bank - Development Research Group (DECRG)

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MSN3-311
Washington, DC 20433
United States

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