nep-gro New Economics Papers
on Economic Growth
Issue of 2017‒02‒26
seven papers chosen by
Marc Klemp
Brown University

  1. The International Epidemiological Transition and the Education Gender Gap By Klasing, Mariko Jasmin; Klasing, Mariko J.; Milionis, Petros
  2. The Long Shadow of the Chinese Cultural Revolution: The Intergenerational Transmission of Education By Meng, Xin; Zhao, Guochang
  3. A cross-country empirical test of cognitive abilities and innovation nexus By Azam, Sardor
  4. Modelling Natural Resources, Oil and Economic Growth in Africa By Janda, Karel; Quarshie, Gregory
  5. Sectoral Cognitive Skills, R&D, and Productivity: A Cross-Country Cross-Sector Analysis By Sasso, Simone; Ritzen, Jo
  6. The Inequality-Growth Relationship - An Empirical Reassessment By Kolev, Galina; Niehues, Judith
  7. Retirement, intergenerational time transfers and fertility By Eibich, Peter; Siedler, Thomas

  1. By: Klasing, Mariko Jasmin; Klasing, Mariko J.; Milionis, Petros
    Abstract: We explore the impact of the international epidemiological transition on educational outcomes of males and females over the second half of the 20th century. We provide strong evidence that the large resulting declines in mortality rates from infectious diseases gave rise to differential life expectancy gains across genders, with females benefiting mostly from them due to their greater responsiveness to vaccination. We also document that these gender differences in life expectancy gains are subsequently reflected in similar differential increases in educational outcomes for males and females. Using an instrumental variables strategy that exploits pre-intervention variation in mortality rates across different infectious diseases we confirm the causal nature of these effects and show that the magnitude of the effects account for a large share of the reduction in the education gender gap that emerged over this period.
    JEL: I15 J16 O11
    Date: 2016
  2. By: Meng, Xin (Australian National University); Zhao, Guochang (Southwest University of Finance and Economics, Chengdu)
    Abstract: Between 1966 and 1976, China experienced a Cultural Revolution (CR). During this period, the education of around 17 birth cohorts was interrupted by between 1 and 8 years. In this paper we examine whether, and by how much, this large-scale schooling interruption affected their children's education. We find a strong effect: more interrupted education for parents, less completed education for their children. On average the CR cohort had 2.9 years interrupted education. If they failed to catch up after the CR, this translates to a reduction of 0.87 years of schooling and a 9 percentage points (or 50%) reduction in the probability of completing a university degree for their children relative to the children whose parents did not have interrupted schooling. Our results have strong implications for developing countries prone to long-term conflicts which often adversely affect children's education. As human capital accumulation is one of the main drivers of economic development, these negative schooling shocks affecting current generation education levels will have an impact far beyond the immediate economic development of these war-torn economies and extend to the next generation.
    Keywords: Chinese Cultural Revolution, human capital, intergenerational education transmission
    JEL: I24 I25 N3
    Date: 2016–12
  3. By: Azam, Sardor
    Abstract: In this study we analyze the relationship between national cognitive abilities and innovational output using data from 124 countries of the world. By employing cross-country IQ scores traditionally used by psychological literature to represent national intelligence, and Economic Complexity Index as a novel measure of innovation, our study shows that there is a positive connection between them. We use a variety of tests to check the robustness of the nexus. Overall, our findings indicate that more intelligent nations export more sophisticated and diverse products to the world market and thus are more innovative. Therefore, developing countries should consider investing in human capital and related institutions if they are to boost innovative capabilities and move up the technology ladder in producing and exporting sophisticated and varied lines of products. This should bring them greater economic diversity which could be a right lever in mitigating negative external shocks.
    Keywords: IQ; Intelligence; Economic complexity index; Innovation
    JEL: F10 I25 O3
    Date: 2017–01–20
  4. By: Janda, Karel; Quarshie, Gregory
    Abstract: Using panel data from 1980 to 2010 on 34 sub-Saharan African countries, this paper examines whether institutionalised authority, which is a proxy for state authority, can change the negative relationship between natural resources and economic growth. The key finding is that, institutionalised authority can alter the negative relationship that exists between natural resources and economic growth. We also model the relationship between the oil revenue (fuel exports) and economic growth, and how institutionalised authority can alter this relationship as well.
    Keywords: Economic Growth; Natural Resources; Oil; Institutions; Dutch Disease; Sub-Saharan Africa
    JEL: C33 O43 P52 Q43
    Date: 2017–02–10
  5. By: Sasso, Simone (Maastricht University); Ritzen, Jo (IZA and Maastricht University)
    Abstract: We focus on human capital measured by education outcomes (skills) and establish the relationship between human capital, R&D investments, and productivity across 12 OECD economies and 17 manufacturing and service industries. Much of the recent literature has relied on school attainment rather than on skills. By making use of data on adult cognitive skills from the Programme for the International Assessment of Adult Competences (PIAAC), we compute a measure of sectoral human capital defined as the average cognitive skills in the workforce of each country-sector combination. Our results show a strong positive relationship between those cognitive skills and the labour productivity in a country-sector combination. The part of the cross-country cross-sector variation in labour productivity that can be explained by human capital is remarkably large when it is measured by the average sectoral skills whereas it appears statistically insignificant in all our specifications when it is measured by the mere sectoral average school attainment. Our results corroborate the positive link between R&D investments and labour productivity, finding elasticities similar to those of previous studies. This evidence calls for a focus on educational outcomes (rather than on mere school attainment) and it suggests that using a measure of average sectoral cognitive skills can represent a major step forward in any kind of future sectoral growth accounting exercise.
    Keywords: sectoral cognitive skills, productivity, R&D, human capital, knowledge stock
    JEL: I21 J24 O47
    Date: 2016–12
  6. By: Kolev, Galina; Niehues, Judith
    Abstract: Recently, some influential empirical studies found evidence in favor of a negative relationship between income inequality and economic growth, implying the conclusion that inequality reducing policies will foster economic growth. The studies have in common that they all rely on the System GMM dynamic panel estimator. We argue that this estimator is most likely to suffer from a severe weak instrument problem in the inequality-growth setting because lagged differences of inequality have practically no explanatory power for currrent inequality levels. Thus, it is biased in the direction of OLS and fails to control for country heterogeneity. Using traditional Fixed Effects models or Difference GMM estimators yields positive coefficents on the inequality variable. Furthermore, we find evidence for a non-linear relationship between inequality and growth when considering a sample of developed and developing economies. Thus, the effect of net income inequality on growth seems to be negative only for less-developed countries and for countries with high levels of inequality.
    JEL: O15 O47 H23
    Date: 2016
  7. By: Eibich, Peter; Siedler, Thomas
    Abstract: Retirement increases the amount of leisure time. Retired parents might choose to invest some of their time into their adult children, e.g. by providing childcare. Such intergenerational time transfers can have important implications for retirement and family policies. This paper estimates the effects of parental retirement on their adult children’s fertility and labor supply. We use a representative household panel dataset from Germany to link observations on parents and adult children, and we exploit eligibility ages for early retirement using a regression discontinuity design for identification. The results show that early parental retirement induces a significant and considerable increase in (adult) children’s fertility. It also decreases labor supply of daughters. The analysis of time use data shows that retired parents provide childcare and assist their children with domestic duties. The findings suggest that early retirement policies can have important spillover effects on younger generations.
    JEL: J13 J22 J26
    Date: 2016

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