Explaining Educational Attainment across Countries and over Time

Explaining Educational Attainment across Countries and over Time

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Introduction Important implications for educational policy A faster increase in schooling in poor than in rich economies in this model - even when their income gap does not decrease. Model of HC accumulation that emphasizes productivity and life expectancy differences across countries/time Key Question : what explains educational attainment across countries and their evolution over time?
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Other Literature Large amount of literature on the subject focus on a point in time Model built on Bils & Klenow (2000) - focus on cross- sectional correlation of schooling on per capita income growth focus on differences in productivity and life expectancy Key differences: focus on broader dimension of the data & allow for an income effect through non-homothetic preferences and for hours of work across countries Why? Critical in understanding the convergence pattern in educational attainment across countries.
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Panel dataset for 84 countries from 1950-2005 for a measure of educational attainment and income. Data Large differences in schooling measures across countries In 1950 the richest 10% of countries attained an avg of 8.1 yrs of schooling; the poorest 10% - 1.3 yrs 6-fold difference. By 2005, the difference declined to 2-fold Avg years of schooling increased over time in all countries in our sample. Increase in schooling of 37% - top decile; 299% - bottom decile b/w 1950 and 2005 Avg years of schooling have increased more in poor than in rich countries dispersion in schooling levels has decreased overtime, even with no change in relative income. Key Facts
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Average Years of Schooling Population 25 to 29 Selected Yrs
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GDP per Capita and Schooling across Countries
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GDP per Capita and Schooling across Countries 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 0.00 5.00 10.00 15.00 Model Data GDP per Capita and Schooling across Countries (1950) Schooling 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 0.00 5.00 10.00 15.00 Model Data GDP per Capita and Schooling across Countries (2005) Schooling
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Model Key Features: Basic standard model built from Bils & Klenow (2000) Income effect from non-homothetic preferences Labor supply is endogenous Consider schooling as a time allocation problem 1 unit of time (at birth) Schooling Work Leisure time
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