Research " EDUCATION AND ECONOMIC GROWTH EVIDENCE FROM CHINA AND POLICY IMLICATION " docx

measures for China, an axamines causality between education and ore acceptabie econometric models conomic growth by employing 2 revised aggregate production function and autcregress:ve

EDUCATION AND ECONOMIC GROWTH

EVIDENCE FROM CHINA AND POLICY IMPLICATIONS

Weibin Xu

A DISSERTATION

In

Education

Presented to the Faculties of the University of

Pennsylvania in Partial Fulfillment

Of the Requirements for the Degree of Doctor of Philosophy

All rights reserved This microform edition is protected against

unauthorized copying under Title 17, United States Code

Bell & Howell Information and Leaming Company

300 North Zeeb Road P.O Box 1346 Ann Arbor, MI 48106-1346

To my grandfather, a nhard-workin

Acknowledgement

This dissertation started froma research project I undertook

at Beijing University in May 1999, where Dr Weifang Min

Weifang Min for nis constant encouragement and support Since chen, I went through all the pains and pitfalis of reviewing

Xin Wei, Dr Fenaqiao Yan, and Wenli Li have given their comments and suggestions on part of my dissertation, helping me collecting data, and inspiring me with their Critical insights = send my thankfulness to all of them While this study absorcs many of other’s ideas and comments, responsibility of tne contents, including all the errors and mistakes should solely ce taxen on

measures for China, an axamines causality between education and

ore acceptabie econometric models

conomic growth by employing 2

revised aggregate production function and autcregress:ve 2agded qrowth regression model, which expli citiy includes lagged dependent variables, nave been estimated by a speciai

approach co take into consideration the unique

positive lagged effects upon economic growth, which in this study

is measured as total GDP and real per capita GDP growth as weli Dramatic variation across three geographic regions in terms of impact of education has been detected, which may signal

fundamental disparity of the combination of factor insuts in

Nal Oalanced development of

es a ror economic

long-term growth, and education is one of the caus

qrowtn

vi

Table of Contents

Go 3 Operationalization of Key Variabies aa

4.1 Simple Statistical Analysis iis

List of Tables Table 2.1 Education Data: Selected Countries

Table 2.2 Contribution of Education to Growth of Real

National Income Table 2.3 Contribution of Education to Economic

Growth in Selected Countries Table 2.4 Contribution of Education to Economic Growth

in China Table 2.5 Returns to Investment in Education

Table 2.6 Returns to Education by Sex

Table 2.7 Returns to Investment in Education

Table 2.8 Variation in Returns to Education since i985

Table 3.1 Economic Growth Rate by Various Merhcds

Table 3.2 China's GDP growth by Different Deflators

Table 3.3 Annual Average Growth Rate of Per Capita GDP

by Region Table 3.4 Annual Average Growth Rate of GDP by Region

Table 3.5 Standard Deviation of Per Capita Growth by

Table 3.6 Standard Number of Schooling Years for Each

Level of Education

Table 3.7 Distribution of Secondary Enrollment

Table 3.8 Standard Deviation of Educational Attainment

Region in Selected Years

3.10 Retail Price Index and Price Index of

Investment

Correlation Coefficients of Educational

Attainment and Per Capita GDP Growth Rates

by Levels of Education and Periods

Capita GDP and Per Capita GDP Growth Rates

Table 4.5 Correlation Coefficients between

Educational Attainment and Per Capita GDP

Table 4.6 Simple Econometric Models on Economic

Table 4.7 Estimates of Aggregate Production without

Table 4.8 Fixed Effect Model with Interaction Terms L46

Table 4.9 Correlation Coefficients between GDP and

Various Input Factors

Table 4.10 Correlation Coefficients of between

Physical Stocks and Various Education Measures 150 Table 4.11 Fixed Model of Economic Growth 158 Table A.1 Enrollment and Population by Province 180 Table A.2 Census Data of Population by Education

Table A.3 Average Years of Schooling by Province 216

x

Table A 4 Provinces by Region

Table A.5 Comparison of Various Price Index for

Physical Capital Investment Table A.6 Physical Capital Stock by Province

Table A.7 Comparison of Various Price Index for Growth

Table A.8 Average Per Capita Growth

Table A.9 Aggregate Production Function with

Previous GDP

Table A.10 Aggregate Production Without Previous GDF

Table A.11 Autoregressive Distributed Lag Model

Table A.i2 Multicollinearity Diagnosis

Table A.13 Aggregate Production Function by Region

Table A.14 Growth Regression

Table A.15 Growth Regression with Birth Rate

Table A.16 Growth Regression with Education Quality

Table A.17 Growth Regression by Region

Table A.18 Growth Regression by Five-year Period

3.1 Economic Growth of China from 1979-1997

3.2 Trend of Educational Attainment by Region

3.3 Average Physical Stock by Region

3.4 Trend of Within-region Difference in

Physical Capital Stock 3.5 China Arable Land from1978 to 1995

Population and Employed Persons of

eath Rate of China

and Per Capita

Figure 4.4 Education Attainment Deviation and Per Capita

GDP Growth 1978-1997 \O

Figure 4.5 Lag Coefficients of Education Measures

for Aggregate Production Function (Controlled for Contemporaneous GDP)

Lag Parameter Estimates of

For Aggregate Preduction Function iNot

Controlled for Previous GDP}

Figure 4.7 Lagged Education Coefficients of

Autoregressive Lagged Distributed Mcdel Figure 4.8 Education Impact by Region

Figure 4.9 Lag Coefficients of Various Education

Figure 4.10 Lag Coefficients for Various Education 9

Growth Regressions (Controlled for Education Quality)

Figure 4.11 Lagged Education Impact by Region

Figure 4.12 Coefficient Estimates of Education for Growt

Regression (Controlled for Initial GDP) Figure 5.1 Seamless Web

XIY

i STATEMENT OF THE PROBLEM

Since China launched its economic reform in 1978, it has enjoyed an unparalleled period of economic success, which has aroused interest around the world Building on pre-reform achievements ineducation, health, and macroeconomic stability, China witnessed an average annual GDP growth of 9.8 percent from

1978 to 1997, with a surge to 11.4 percent from 1982 to 1988 Following a brief retrenchment that trimmed growth to 4.i percent in 1989 and 3.8 percent in 1990, the economy has resumed very rapid growth, reaching a preathtaking 14.2 percent in 1992 and 13.5 percent in 1993 Although affected by the Asian

<inancial crisis, China still leads Asian economies with growth

of 8.8 percent in 1997

China also is successful in reducing poverty Since 1978, a staggering 200 million people nave been lifted out of absolute poverty (World Bank 1997b) Incontrast to the pre-reform period, when real incomes were flat or declining and the state squeezed consumption to invest 30 percent of GNP, there has seen a marked improvement in living standards Radio, TVs, and other consumer goods have become commonplace, and consumption of pork doubled from 1978 to 1988 to nearly 15 kilograms per person annually (World Bank 1992)

Since reforms started in 1978, however, China's income

distribution has become increasingly unequal The Gini

coefficient, as lowas 28.8 in 1981, reached 38.3 in 1995 (World Bank 1997b), similar to that of the United States In 1981, China was an egalitarian society, with an income distribution similar

to that of Finland, the Netnerlands, and Romania But rapid economic growth has brought dramatic change, so that China's income inequality is now just about average by international standards (Word Bank 1997b, 7) A change of this magnitude is highly unusual and signals deep structural transformations in the underlying distribution of assets and in their rates of return

During the same period, China witnessed a steady growth in education, with an explosive growth occurring in higher education The enrollments in higher education expanded from about 856 thousand in 1978 to 3.17 million in 1997 During the period from 1978 to 1995, government expenditure on education increased from 75.05 hundred million yuan to 1196.65 hundred miliion yuan (in current prices), but its share in GDP, whicn removes the effect of price increase, instead decreased from 2.1 percent to 1.6 percent Between 1990 and 1997, a period for which more detailed data are available, higher education

4

enrcllment rates grew from 3.7 percent to 9.1 percenE (7i 1999), and adult illiteracy rate fell from 15.88 percent to 12.11 percent Overall, average years of schooling increases from4.49 years in 1990 to 5.42 years in 1997 (State Statistical Bureau

1998)

Tne growth in education has had a significant impact on not only productivity and economic growth, but aiso on poverty and income inequities The relationship between education and economic growth is not just one way Psacharopoulos (1995) stresses that human capital and economic growth 'reinforce one another' (Psacharopoulos 1995, 2), and education is believed

co be one of the most important elements in human capital He explains:

Economic growth is needed to generate more opportunities for people to earn their way to better life Human capital must be built up so people wiil have the skilis and abilities they need to take advantage of tnose opportunities Economic growth makes it more attractive for people to improve their own and their children's skills and abilities and gives them and their governments more resources to do

so Investing in human capital better equips people for new work possibilities and thus makes the entire economy more competitive in global markets and strengthens the prospects for faster economic progress (Psacharopoulos

1995, 2)

Science and technology play a critical role as sources of economic growth and competitiveness in the new information

economy Dramatic innovation in information technologies in the past two decades nas made technological capacity even more crucial for economic growth Because the adequate use of advanced information technology is highly dependent upon the general level of education of labor force, there is a growing connection between people's intellectual capacity and their countries' development potential (Carnoy and others 1982) Higher education institutions are central to a nation's capacity to connect with the new international knowledge system and to adopt, adapt, and further develop the new technologies Castells (1993) vividly put it

If knowledge is the electricity of the new informational international economy, then institutions of higher education are the power sources on which the new development process must rely

There 1s extensive literature on the effect of education on economic growth However, this study goes further and

concentrates on the causal relation between education and economic growth, in an attempt to generate more useful policy recommendations In contrast to the increasingly enormous literature on verifying the effects of education on economic growth, the efforts to determine the direction of the relation between education and economic growth and timing of tne effects

of education on economic growth have been largely igncred

In Chapter 2, the present study makes a modest attempt to review some of the important research on this problem, such as the contribution of education to economic growth, that has during the last four decades drawn enormous attention among economists, educators and policy makers, and critiques the methodological problems embedded in prior studies

The literature survey does not claim to be exhaustive, nor

is it possible ina study cf this size Instead, major recent studies in general, and those pertaining to China in particular, will be identified, and special attention will be paid to their methodology Specifically, the literature review is divided into three sections: It starts with the general description of the basic models underlying the current study in Section 2.1 Section 2.2 reviews tne abundant research on relationship between education and economic growth The literature review concludes with a number of research questions articulated in Section 2.3

Following the critical review of the major studies, Chapter

3 identifies major data sources, examines the strength and

weakness of these sources, and constructs the basic variabies based on the panel data covering all 30 provinces in China for

3

a period of two decades, 1978-97 Descriptive statistics of economic growth rate and total GDP and the major independent variables are produced

Chapter 4 focuses on data analysis Inferential statistics are produced mainly along two lines of modei specification: aggregate production function and growth regression Every effort is made to make sure the findings are not piased due to rarious statistical oroblems, such as extreme values,

autocorrelation, neteroscedasticity, and multicoilinearity The study concludes with presentation of research finding within the context of proposed research questions Limitations

cf the current study are identified, and suggestions for future

research are laid out.

Ti REVIEW OF THE LITERATURE

A large body of research has been conducted in this field, especially following the new endogenous growth theory raised

in late 1980's This study surveys most recent studies since

1990, with an added focus on studies conducted in China

In the first section, the theoretic framework of Solow's neoclassical growth model as well as more recent endogenous growth model is laid out Then recent empirical evidence of effects of education on economic growth is presented in two major areas: growth accounting and return to education Also inthis section is a methodological review of the empirical studies The third section is devoted to a sketch of researcn questions

derived from the literature review

2.1 Theoretic Framework

Economists have put forward two broad interpretations of economic growth, the neoclassical theory and the endogenous growth approach Solow's neoclassical growth theory came first Then, the expanded Solow's model, a model primarily based on Mankiw, Romer and Weil (1992), which explicitly includes human capital into the growth analysis, was introduced Finally, the endogenous growth medel, picneered by Romer (1990) and Lucus

-(1988), will be presented

Solow’s Growth Model

In the 1960s, growth theory consisted mainly of the

neoclassical models, as developed by Solow (1956), Cass (1965), and Koopmans (1965) It is based on the assumption that as physical and human capital are accumulated their incremental contribution to output diminishes Over time, wage rates and capital-iabor ratios across different countries are expected

tc converge Consequently, initial conditions or current disturbances have no long-run impact on the level cf output and consumption Without technological change, per capita output should converge to roughly equal level That is, poor economies will eventually catch up with the leaders by growing faster than rich economies for the same level of investment in physical and human assets

A simple neoclassic growth model was set out by Solow (1956, 1957) Tf Q represents output and K and L represent capital and labor inputs in 'physical' units, then the aggregate production function can be written as:

The variable t for time appears in Fto allow for technical change,

8

which includes any kind of shift in the production function, such as slowdowns, speedups, improvements in the education of the labor force, etc

Under the assumption of neutral technical change, the production function takes the special form

where the multiplicative factor A(t) measures the cumulated effect of shifts over time Differentiating (2) totally with respect to time and dividing by Q, ome obtains

If all factor inputs are classified either as K or L, then the available figures always show w,and w, adding up to unity,

that is, the function has constant return to scale, which allows

to relate output per worker to the capital/labor ratio

of the GDP Of special interest to this study is the contribution

cf education to economic growth

The Solow Model with Human Capital

The concept of capital in the neoclassical mode can be usefully broadened from physical goods to include human capital

in the forms of education, experience, and health Economists have long stressed the importance of human capital to economic growth

In an seminal paper published in 1992, Gregory Mankiw, David Romer, and David Weil noted that the fit of the Solow model could

be improved by extending the model to include human capital, i.e., by recognizing that labor in different economies may

10

possess different levels of education and skills

Suppose that output, Y(t), in an economy is produced by combining physical capital, K(T), human capital, H(t), with raw labor, L(t), under the level of technology, A(t)

L(t) and A(t) are assumed to grow exogenously at rates n and

Defining kas the stock of physical capital per effective unit

of Labor, k=K/AL, y the level of output per effective unit cf labor, y=Y/AL, and h the level of human capital per effective unit of labor, h=H/AL, the growth of k and h is given by

kự)= s, YŒ)—(+ g~ở)&() ( hỮ) = sự) (1+ g +ở)hŒ) (10) where 0 is the rate of depreciation It is assumed that one unit

of consumption can be transformed into either one unit of onysical capital or one unit of human capital Furthermore, human capital is assumed to depreciate at the same rate as physical capital, and @+f#<!, which means that there are decreasing returns to ali capital

Ul

Equations 9 and 10 imply that the economy converges to a steady state defined by

In) = In 0) + gr - 22min g +5) In(s, )+ B

ự -a-B ———— l-a-£B l-a-fB In(s„ )

(13)

This equation shows that per capita income decreases with population growth and increases with the accumulation of physical and human capital

Endogenous Growth Theory

Neoclassical growth theory became the dominant way to model economic growth in the 1970s and 1980s, but doubts remained about its value Empirical studies, first in the United States and then in many other countries, decomposed economic growth into what can be accounted for by increases in factor inputs and what can be accounted for by increases in TFP The contribution of TFP often outweighed that of factor augmentation, which

12

supported the neoclassical policy recommendation of promoting technical change Nevertheless, it was worrying that the key contribution was calculated as a residual, and that the engine

of growth was exogenously determined ‘technical change.' International comparisons of growth rates also pointed to two facts, which are inconsistent with the basic neoclassical growth model First, major policy shifts affecting international trade have been associated with large and sustained changes in growtn rates Second, if there are diminishing returns to factors, then less developed countries should have higher marginal products

of capital and therefore faster growth in output than hign- income countries, the theory predicts convergence of per capita incomes Instead, we observe persisting income differences across countries Barro (1991) presents the argument

succinctly:

In neoclassical growth models with diminishing returns, such as Solow (1956), Cass (1965) and Koopmans (19655), a country's per capita growth rate tends to be inversely related to its starting level of income per person Therefore, inthe absence of shocks, poor andrichcountries would tend to converge in terms cf levels of per capita income However, tnis convergence hypothesis seems to xe inconsistent with the cross-country evidence, which indicates that per capita growth rates are uncorrelated with the starting level per capita product

Nevertheless, convergence could be identified ina

conditional sense, i.e., by holding some variables constant then

a negative relationship between initial income and subsequent growth could be found In other words, if economies differ in various respects, including propensities to save, access to technology, and government policies, then the convergence force applies only in a conditional sense The growth rate also tends

to be high if the starting per capita GDP is iow in relation

to its long-run or steady-state position; that is, if an economy begins far below its own target position

In the late 1980s, growth theorists began to questicn tne key assumptions of the neoclassical growth modei: constant returns

to scale and diminishing returns to repreducible capital The new growth theory became known as endogenous growth theory, because it aimed to 'endogenize' the sources of growth in contrast to neoclassical growth, which relied on unexplained technical change In this model, increments in physical and numan capital make either the same contribution or an increasing contribution to output as economies become richer

Endogenous growth originates with Arrow (1962) and his analysis of learning py doing He constructed models in whicn ideas were unintended by-products of production or investment

In his models, each discovery immediately spilled over to the

H4

entire economy, an instantaneous diffusion process that might

be technically feasible because knowledge is nonrival Uzawa (1965) constructed a planning model with labor growing

exponentially and knowledge produced ina separate R&D sector Building on the work of Arrow (1962) and Uzawa (1965), Romer (1986) drew attention to the fact that exogenous technical change was an unsatisfactory mechanism for causing per capita consumption to grow Once growth is made endogenous, tricky issues of pricing or decentralizability become intrinsic Lucas (1988) introduced an average labor quality variable in the production function for aggregate output At each date there was output and an indirect efficiency gain, an externality yielding a shift in the scale of production In these medels, growth may go on indefinitely because the returns to investment

as economies develop However, they did not really introduce

a theory of technological change

A decentralized theory of technological progress requires fundamental changes to the framework in order to incorporate elements of imperfect competition The incorporation of R&D theories and imperfect competition into the growth framework,

however, did not come until Romer (1990), which combines

1§

endogenous growth in per capita consumption and an approach to decentralizability In this model, the R&D sector was financed

by a mark-up in the intermediate goods sector The intermediate goods were involved in producing final output

The Romer (1990) model endogenizes technological progress py introducing the search for new ideas by researchers interested

in profiting from their inventions In contrast to the

neoclassical mcdeis, in which technical change is exogenous, the Romer model describes technological progress as driven by R&D and explains how the technological frontier is continually pushed outward

The aggregate production function in the Romer model defines output as a function of the capital stock, labor, and the stock

of ideas

where @ is a parameter between 0 and 1

For a given level of technology, A, the production function exhibits constant returns to scale in K and L, However, when ideas (A) are also an input of production, then there are increasing returns That is, the production function exhibits increasing returns with respect to all three inputs; if capital, labor and the stock of ideas double, then output will more than

16

double The presence of increasing returns to scale results primarily from the nonrivalrous nature of ideas

For the moment, A is assumed to grow at a constant rate g:

A

Capital accumulates as géople in the economy forego consumption

at some given rate, s,, and depreciates at the exogenous rate

where T=¥/AL, & =K/AL, and k=dk ‘ut

The capital accumulation formula can easily be analyzed ina Solow diagram (see figure 2.1)

Notice that at k, , the amount of investment ver worker exceeds the amount needed to keep capital per worker constant, so that

capital deepening occurs, that is,k increases over time This

capital deepening will continue until £=#`, at which point

sÿ=(n+g+đ)k, so that £=0 Atr this point, the amount of capital per effective worker remains constant, and we call sucha point

Figure 2.1 The Basic Solow Diagram

To see the growth implications of the model with technology, rewrite the production function i4 interms of output per worker, and take logs and differentiate:

Vv k A where y=Y/L, and k=K/L

At the steady state, £ equals 0, so it is easy co show that brad: Given equation 19, along a balanced growth path, ver capita

18

output, the capital-labor ratio, and technology must grow at the same rate

According to Romer model, A(t} is the stock of knowledge or

the number of ideas that have been invented over the course of

history up until time c In the simplest version of the model,

4 is equal to the number of people attempting to discover new ideas, L,, multiplied by the rate at which they discover new ideas, ở:

Dividing both sides of equation 21 by A yields

Combining equations 14, 16, 20 and 23, we find tnat

steady-state income per capita is

in) = In Lt) +n -s, )s, +Ind —Ing, +—“—Ins, -—2—-Inn+ g, +)

19

(25) According to equation 25, per capita output is positively related to the magnitude of labor force along a balanced growth path, which largely arises fromthe nonrivalrous nature of ideas Further, amore populous world economy simply has more potential researchers leading to more ideas

Many of the new growth theorists emphasize the role cf numan capital, which may yield externalities; people are more

productive when surrounded by educated people The economy wiil underproduce knowledge because the private return is less than the social return (due to the externalities), so tnere is an argument for government to subsidize the provision of schooling and other methods of knowledge diffusion

2.2 Education and Economic Growth

This section focuses on the empirical evidence of the contribution of education to economic growth, along two main lines of research: growth accounting and return to education This section concludes with description of the methodology problems in empirical studies

The attainment of high, steady rates of economic growth, measured by the growth rate of Gross Domestic Product (GDP), has been a key goal for many countries In an attempt to

20

understand the growth process, economists have examined the relative importance of various factors, including education,

in the growth process

As Miller (1967) points out, 'not just any kind of education will' promote economic growth ‘Education is a source of economic growth only if it is anti-traditional to the extent that it liberates and stimulates as well as informs the

individual and teaches him how and why to make demands upon himself.'

Dean (1984) wonders whether education affects economic growth through its impact on cognitive skills or rather through 'more subtle skills, or heightened personal ambitions' (Dean 1984, 5) He also wonders whether the main impact of education is through its 'development of flexible and imaginative future employees who can break bottlenecks and respond to unexpected opportunities' (Dean 1984, 5) Finally, he asks whether

education is a complement to other inputs in the production process, 'so that its contribution rises or falls depending on events occurring elsewhere in the economy' (Dean 1984, 5)

In short, the contribution of education to growth is presumed

to occur through its ability te increase the productivity of labor force in various ways, including both technical training

21

and general education But exactly how education increases productivity, how important it is, and in what ways it is important, are difficult questions which remain unanswered

in general, countries that have higher levels of income tend

to nave higher levels of educational attainment (see Table 2.1), out this cannot be interpreted to mean that education is a necessary cause of higher level of output and income Education

is both an investment good and a consumption good As income grows people tend to demand more education, and can afford more education, both for themselves and for their children Whether education contributes to rising productivity is a debatable point

In order to understand the contribution of education to growth,

99

one must understand the causes of growth and the growth process itself Traditionally, economists have identified tnree factors

of production: land, labor, and capital In the growth process, land will presumably not change, so that the key factors are the growth of labor and capital

Table 2.1 Education Data: Selected Countries

Per capita GNP in 1996 in USS

Adult illiteracy Rate in 1995

Gross enrollment rate in 1995

A

B

Cc

D

Source: World Bank (1998)

Life expectancy at birth in 1996

In the beginning, the unexplained proportion of economic growth, i.e., the 'residual,' was attributed to ‘technical

progress' (Solow1957) Later works (e.g., Denison 1962) clearly established that changes

23

in factor productivity of output per

unit of input account for the residual A certain part of this productivity growth is attributable to improvements in resource allocation, changes in the legal and human environment, and economies of scale There is a large residual labeled ‘advances

in knowledge and miscellaneous determinants,' which accounts for a iarge share of total growth In Denison's words, 'The advance in knowledge is the biggest and most basic reason for the persistent long-term growth of output per unit of input’ (Denison 1979, 79) Broadiy speaking, it can be said to constitute non-formal education, and technical and managerial

<nowledge, obtained in a variety of ways ranging from organized research to simple observation and experience In other words, numan capital, particularly education, forms a significant proportion of this residual

The pioneering work by Schultz (1961) paved the way for medern growth accounting in general, and for research of education's contribution to economic growth in particular At the same time, the major work on growth accounting has been carried out by Denison (1962, 1967, 1974, 1979, 1984, 1985) Denison (1962) estimated that 23 percent of the growth rate in per capita (employed) income between 1909-29 in the United States could

be due to education, and the corresponding figure was as nigh

24

as 42 percent during 1929-57 According to his later works (Denison 1974), it was found that 21 percent of the growth during 1948-73 was due to increased levels of education of the labor force A summary of the results obtained by Denison (1985) is reported in Table 2.2

Table 2.2 Contribution of Education to Growth of Real National

Growth ascribed to education 0.48 0.52 9.62 Growth ascribed to education (%) i9.7 14.5 49.2 Growth of real NI* ver employee 1.33 2.45 -0.26 Growth ascribed to education 0.48 0.52 0.42 Growth ascribed te education (%) 36.1 21.2 -

- Not available

a NI refers to national income

Source: Data are from Denison (1985)

Denison's and Shultz's widely accepted growth accounting equations were replicated by many researchers In a

comprehensive survey, Psacharopoulos and Woodhall (1985) reports estimates of the contribution of education to economic

25