We combine the augmented Solow model with the Mincer equation to derive a specification that identifies an education … of the education externality, which is given by the difference between the microeconomic and the macroeconomic return to … education. Relative to our benchmark value that is based on a parameterization of the derived specification, we find that the …

, misspecifies the relationship between education and the stock of human capital. Based on human capital theory, the specification of … human capital should be extended to allow for decreasing returns to education and for differences in the quality of a year … of education. Cross-country differences in qualityadjusted human capital can account for about half the world …

This paper empirically analyzes the impact of aid on education for about 100 countries over the period 1970-2005. We … of the link between government expenditure and education, (iii) the quality of institutions in the recipient country, and … enrolment. This result is robust to the method of estimation, employing instruments to control for the endogeneity of aid, and …