What is the Real Effect of Schooling on Economic Growth?

This paper examines the effect of schooling on economic growth. It tests the link between schooling and economic growth using the system GMM estimation for a panel of 86 countries in the years 1960–2005. Affirming the results of the previous literature the positive impact of schooling on growth has been confirmed. The paper presents two main findings. First, additional year of schooling contributes positively to per capita output growth. Secondly, high percentage share of population with no formal education results in economic growth slowdown.