Education, Growth and Income Inequality

Thijs van Rens
Authors registered in the RePEc Author Service: C. N. Teulings ()

No 653, CESifo Working Paper Series from CESifo

Abstract: When types of workers are imperfect substitutes, the Mincerian rate of return to human capital is negatively related to the supply of human capital. We work out a simple model for the joint evolution of output and wage dispersion. We estimate this model using cross-country panel data on GDP and Gini coefficients. The results are broadly consistent with our hypothesis of diminishing returns to education. The implied elasticity of substitution fits Katz and Murphy’s (1992) estimate. A one year increase in the stock of human capital reduces the rate of return by about 2 per cent. The combination of imperfect substitution and skill biased technological change closes the gap between the Mincer equation and GDP growth regressions almost completely.

Date: 2002
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Education, Growth, and Income Inequality (2008)
Working Paper: Education, growth and income inequality (2006)
Working Paper: Education, Growth and Income Inequality (2003)
Working Paper: Education, Growth and Income Inequality (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_653

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