TY - JOUR
T1 - Why and how education affects economic growth
AU - Zeira, Joseph
PY - 2009
Y1 - 2009
N2 - This paper suggests an additional channel through which education affects economic growth. If growth is driven by industrialization of production, where machines replace labor in a growing number of tasks, then operating these machines requires workers who are educated, namely literate and know arithmetic, whose human capital is less specific and more general. As a result, technology adoption depends negatively on wages of educated workers. Hence, economic growth depends negatively on the cost of education or on the barriers to acquire education. The model shows that if the cost of education is high, economic growth might be slow and even stop completely, creating a development trap.
AB - This paper suggests an additional channel through which education affects economic growth. If growth is driven by industrialization of production, where machines replace labor in a growing number of tasks, then operating these machines requires workers who are educated, namely literate and know arithmetic, whose human capital is less specific and more general. As a result, technology adoption depends negatively on wages of educated workers. Hence, economic growth depends negatively on the cost of education or on the barriers to acquire education. The model shows that if the cost of education is high, economic growth might be slow and even stop completely, creating a development trap.
UR - http://www.scopus.com/inward/record.url?scp=67651162413&partnerID=8YFLogxK
U2 - 10.1111/j.1467-9396.2009.00836.x
DO - 10.1111/j.1467-9396.2009.00836.x
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AN - SCOPUS:67651162413
SN - 0965-7576
VL - 17
SP - 602
EP - 614
JO - Review of International Economics
JF - Review of International Economics
IS - 3
ER -