Human Capital in Growth Regressions: How Much Difference Does Data Quality Make? An Update and Further Results

81 Pages Posted: 19 Nov 2002

See all articles by Angel de la Fuente

Angel de la Fuente

Spanish Council for Scientific Research (CSIC) - Insitute for Economic Analysis; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Rafael Doménech

University of Valencia - Department of Economic Analysis

Date Written: October 2002

Abstract

We construct estimates of educational attainment for a sample of OECD countries using previously unexploited sources. We follow a heuristic approach to obtain plausible time profiles for attainment levels by removing sharp breaks in the data that seem to reflect changes in classification criteria. We then construct indicators of the information content of our series and a number of previously available data sets and examine their performance in several growth specifications. We find a clear positive correlation between data quality and the size and significance of human capital coefficients in growth regressions. Using an extension of the classical errors in variables model, we construct a set of meta-estimates of the coefficient of years of schooling in an aggregate Cobb-Douglas production function. Our results suggest that, after correcting for measurement error bias, the value of this parameter is well above 0.50.

Keywords: Human capital, growth, measurement error

JEL Classification: I20, O30, O40

Suggested Citation

de la Fuente, Angel and Doménech, Rafael, Human Capital in Growth Regressions: How Much Difference Does Data Quality Make? An Update and Further Results (October 2002). Available at SSRN: https://ssrn.com/abstract=352860

Angel De la Fuente (Contact Author)

Spanish Council for Scientific Research (CSIC) - Insitute for Economic Analysis ( email )

UAB Campus
E-08193 Bellaterra
Spain
+34 3 580 6612 (Phone)
+34 3 580 1452 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Rafael Doménech

University of Valencia - Department of Economic Analysis ( email )

Campus de los Naranjos
46022 Valencia
Spain
+96 382 8210 (Phone)
+96 382 8249 (Fax)

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