We estimate the direct and external effects of levels of schooling on personal income in Ecuador in 2011, using data for 69,653 individuals in 567 municipalities. Using a Mincerian model that includes municipal levels of schooling and the size of the municipality and controls for endogeneity, we...

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...

Development accounting depends on two simplifying assumptions, that economies can be represented by a common aggregate production function and that aggregate factors of production are paid their social marginal products. An aggregate production function can explain income across countries, but...

Annual growth in GDP/adult in Japan has declined from over 10% in 1969 to an average of 1% since the financial crisis in 1991. I show that a dynamic Solow growth model, augmented with human capital, weekly labor-hours, and oil prices, explains Japan’s annual growth rates from 1969 to 2007 as...

This paper explains why different studies present widely-varying estimates of the effect of increased schooling on national income. It shows that when correctly-interpreted, these studies support the hypothesis that a one-year increase in average schooling attainment raises national income...

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...

Using a new data set for human capital/adult, I show that changes in human capital cause economic growth in 56 countries over the 1985 to 2005 period. I show that these results are superior to results using average schooling attainment.

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...