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Education Quality and Development Accounting

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  • Todd Schoellman
Abstract
This paper measures the role of quality-adjusted years of schooling in accounting for cross-country output per worker differences. While data on years of schooling are readily available, data on education quality are not. I use the returns to schooling of foreign-educated immigrants in the U.S. to measure the education quality of their birth country. Immigrants from developed countries earn higher returns than do immigrants from developing countries. I show how to incorporate this measure of education quality into an otherwise standard development accounting exercise. The main result is that cross-country differences in education quality are roughly as important as cross-country differences in years of schooling in accounting for output per worker differences, raising the total contribution of education from 10% to 20% of output per worker differences. Copyright 2012, Oxford University Press.

Suggested Citation

  • Todd Schoellman, 2012. "Education Quality and Development Accounting," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(1), pages 388-417.
    • Handle: RePEc:oup:restud:v:79:y:2012:i:1:p:388-417
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    File URL: http://hdl.handle.net/10.1093/restud/rdr025
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