nep-afr New Economics Papers
on Africa
Issue of 2005‒12‒20
one paper chosen by
Suzanne McCoskey
Foreign Service Institute, US Department of State

  1. A Reevaluation of the Effect of Human Capital Accumulation on Economic Growth: Using Natural Disasters as an Instrument By Raymond Robertson; Mark Skidmore; Hideki Toya

  1. By: Raymond Robertson (Department of Economics, Macalester College); Mark Skidmore (Department of Economics, University of Wisconsin - Whitewater); Hideki Toya (Faculty of Economics, Nagoya City University)
    Abstract: Theoretic growth models and microeconomic evidence suggest that human capital accumulation is an important determinant of per capita income growth. However, outliers, measurement errors, and incorrect specifications may have affected early macroeconomic studies that found a weak relationship between growth and human capital accumulation. While recent studies addressing these problems are beginning to show larger positive effects, the potential endogeneity of human capital accumulation has received relatively little attention. In this paper, we demonstrate that endogeneity is significant and find that natural disasters are a good instrument for changes in schooling. Our resulting instrumental variable estimates are larger than our OLS estimates and are generally larger than those in previous studies. Our analysis also provides some limited evidence of human capital externalities.
    Date: 2005–08

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