The contribution of schooling in development accounting: Results from a nonparametric upper bound

How much would output increase if underdeveloped economies were to increase their levels of schooling? We contribute to the development accounting literature by describing a nonparametric upper bound on the increase in output that can be generated by more schooling. The advantage of our approach is...

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Bibliographic Details
Published in:Journal of development economics 2013-09, Vol.104, p.199-211
Main Authors: Caselli, Francesco, Ciccone, Antonio
Format: Article
Language:English
Subjects:
Accounting
Developing countries
Development
Development accounting
Development economics
Economic theory
Education
Imperfect substitution
LDCs
Schooling
Statistical methods
Studies
Technology
Validity
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Summary:How much would output increase if underdeveloped economies were to increase their levels of schooling? We contribute to the development accounting literature by describing a nonparametric upper bound on the increase in output that can be generated by more schooling. The advantage of our approach is that the upper bound is valid for any number of schooling levels with arbitrary patterns of substitution/complementarity. Another advantage is that the upper bound is robust to certain forms of endogenous technology response to changes in schooling. We also quantify the upper bound for all economies with the necessary data, compare our results with the standard development accounting approach, and provide an update on the results using the standard approach for a large sample of countries.
ISSN:0304-3878
1872-6089
DOI:10.1016/j.jdeveco.2013.02.006