Education and Growth: Where All the Education Went
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2016-02-01
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Universidad EAFIT
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We investigate why the economics literature often finds a negative relationship between increased schooling and GDP growth over short periods. We show that increases in GDP in 98 countries during five-year intervals are correlated with the increases in adultsĀ“ average schooling during the prior 40 years. We find that an additional year of schooling of the work force raised GDP by 7% on average during 1980-2005, but its initial effect on GDP was much smaller. The delayed effect of increased schooling on national productivity explains why recent increases in schooling cannot explain near-term increases in GDP.