I estimate a Solow model augmented with human capital in 42 countries for 1910-2000. Estimated TFP growth is 0.3%/year, and the steady-state rate for GDP/capita is 1.0%/year. Implicitly for high-income countries maintaining growth above this rate will be increasingly difficult.

We model an environment in which different vintages of capital with their different productivities coexist. A reduction in the cost of investment induces investment in new capital which raises both measured capital and measured productivity simultaneously. We calibrate this model to...

This article presents revised estimates of the external rates of return on investment in schooling provided in “Schooling and National Income: How Large Are the Externalities?” The analysis is based on data for the same set of countries, but it incorporates methodological improvements that...

In 1960 Theodore Schultz expounded a human capital theory of economic growth that includes three elements: 1) Countries without much human capital cannot manage physical capital effectively, 2) Economic growth can only proceed if physical capital and human capital rise together, and 3) Human...

This paper challenges Hanushek and Woessmann’s [2008] contention that the quality and not the quantity of schooling determines a nation’s rate of economic growth. I first show that their statistical analysis is flawed. I then show that when a nation’s average test scores and average...

Students´ test scores at ages 9 to 15 are a measure of their skills as workers five to 55 years later. Using historic data on test scores and school attendance, I calculate the share of workers in 2005 that could have scored above 400 and above 600 in 45 countries. I find that the share above...

This paper presents evidence that students´ test scores at ages 9 to 15 are not a good proxy for a nation´s stock of human capital. Across countries test scores rise with increases in human capital up to $40,000/adult (2000$), but then decline as human capital increases up to $125,000/adult....

The marginal product of human capital in Mankiw, Romer, and Weil´s [1992] augmented Solow model measures the direct and two external effects of human capital created from schooling on national income. If this model is valid, its estimates of the share of this marginal product accruing to...