Education, Catch-up and Growth in Spain
The debate over the impact of education on economic growth has recently
led to disagreement when, at the empirical level, the effect of average human
capital on economic growth has been found to be weak. With this paper we revisit
these results by arguing how different educational attainment levels (rather than the
average human capital stock) impact heterogenously different regions’ economic
performance. We build and test a catch-up model where technology adoption takes
place as a function of each region’s human capital composition. We show for 50
NUTS3 Spanish provinces in between 1965 and 1997, how convergence to the
frontier is driven by higher education and, to a lesser extent, by vocational training.
Both theoretical and empirical results are alternative to the well known formalization
proposed by Vandenbussche, Aghion and Meghir (2006). Severe endogeneity
issues, as well as small sample biases, are tackled by using system GMM estimators
and the correction proposed by Windmeijer (2005).
Check other articles from the issue Otoño 2011 or from other issues.