Publication: Human Capital and Macroeconomic Development: A Review of the Evidence
Date
2020-07
ISSN
1564-6971
Published
2020-07
Author(s)
Rossi, Federico
Abstract
The role of human capital in facilitating macroeconomic development is at the center of both academic and policy debates. Through the lens of a simple aggregate production function, human capital might increase output per capita by directly entering in the production process, incentivizing the accumulation of complementary inputs, and facilitating the adoption of new technologies. This paper discusses the advantages and limitations of three approaches that have been used to evaluate the empirical importance of these channels: cross-country regressions, development accounting, and quantitative models. The key findings in the literature are reviewed and some of them are replicated using updated data. The bulk of the evidence suggests that human capital is an important determinant of cross-country income gaps, especially when its measurement is broadened to go beyond simple proxies of educational attainment. The paper concludes by highlighting policy implications and promising avenues for future work.
Citation
“Rossi, Federico. 2020. Human Capital and Macroeconomic Development : A Review of the Evidence. World Bank Research Observer. © Published by Oxford University Press on behalf of the World Bank. http://openknowledge.worldbank.org/handle/10986/36811 License: CC BY-NC-ND 3.0 IGO.”
Report Series
Other publications in this report series
Journal
Journal
Journal Volume
Journal Volume
Journal Issue
Journal Issue