Growth, Distance to Frontier and Composition of Human Capital

53 Pages Posted: 12 May 2005

See all articles by Jerome Vandenbussche

Jerome Vandenbussche

International Monetary Fund (IMF)

Philippe Aghion

College de France and London School of Economics and Political Science, Fellow; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Costas Meghir

Yale University; Yale University - Cowles Foundation; Institute for Fiscal Studies (IFS); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: January 2005

Abstract

We examine the contribution of human capital to economy-wide technological improvements through the two channels of innovation and imitation. We develop a theoretical model showing that skilled labor has a higher growth-enhancing effect closer to the technological frontier under the reasonable assumption that innovation is a relatively more skill intensive activity than imitation. Also, we provide evidence in favor of this prediction using a panel dataset covering 19 OECD countries between 1960 and 2000 and explain why previous empirical research had found no positive relationship between initial schooling level and subsequent growth in rich countries. In particular, we show that in OECD economies it is crucial to isolate the two separate margins of primary/secondary and tertiary education. Interestingly, the latter type of schooling proves to be a factor of economic divergence.

Keywords: Economic growth, human capital, education, imitation, innovation, convergence, technological frontier, wave

JEL Classification: I20, O30, O40

Suggested Citation

Vandenbussche, Jerome and Aghion, Philippe and Meghir, Costas, Growth, Distance to Frontier and Composition of Human Capital (January 2005). CEPR Discussion Paper No. 4860. Available at SSRN: https://ssrn.com/abstract=722424

Jerome Vandenbussche (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Philippe Aghion

College de France and London School of Economics and Political Science, Fellow ( email )

London
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Costas Meghir

Yale University ( email )

37 Hillhouse avenue
New Haven, CT CT 06511
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+12034323558 (Phone)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
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Institute for Fiscal Studies (IFS) ( email )

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National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

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