Pritchett, Lant2014-03-272014-03-272001-09World Bank Economic Reviewhttps://hdl.handle.net/10986/17434Cross-national data show no association between increases in human capital attributable to the rising educational attainment of the labor force and the rate of growth of output per worker. This implies that the association of educational capital growth with conventional measures of total factor production is large, strongly statistically significant, and negative. These are 'on average' results, derived from imposing a constant coefficient. However, the development impact of education varied widely across countries and has fallen short of expectations for three possible reasons. First, the institutional/governance environment could have been sufficiently perverse that the accumulation of educational capital lowered economic growth. Second, marginal returns to education could have fallen rapidly as the supply of educated labor expanded while demand remained stagnant. Third, educational quality could have been so low that years of schooling created no human capital. The extent and mix of these three phenomena vary from country to country in explaining the actual economic impact of education, or the lack thereof.en-USCC BY-NC-ND 3.0 IGOACCOUNTING FRAMEWORKADULT LITERACYAGGREGATE LEVELAGGREGATE OUTPUTAGGREGATE PRODUCTION FUNCTIONAGRICULTUREARITHMETICAVERAGE GROWTHAVERAGE INCOMEAVERAGE LEVELBASIC EDUCATIONCAPITA INCOMECAPITAL ACCUMULATIONCAPITAL STOCKCHILD SURVIVALCOGNITIVE SKILLSCONSTANT RETURNSCONSTANT RETURNS TO SCALECONVENTIONAL WISDOMCONVERGENCE DEBATECONVERGENCE HYPOTHESISCOUNTRY DATADATA SETSDEPENDENT VARIABLEDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDEVELOPMENT OF KNOWLEDGEDEVELOPMENT REPORTDEVELOPMENT STRATEGYDISCOUNTED VALUEDISEQUILIBRIUMECONOMIC COOPERATIONECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC IMPACTECONOMIC LIFEECONOMIC LITERATUREECONOMIC PERFORMANCEECONOMIC RESEARCHECONOMIC THEORYECONOMICSECONOMICS LETTERSECONOMICS OF EDUCATIONEDUCATED WORKERSEDUCATION EXPENDITURESEDUCATION INVESTMENTSEDUCATIONAL ATTAINMENTEMPIRICAL ESTIMATESEMPIRICAL RESULTSENROLLMENT RATEESTIMATED COEFFICIENTEXCHANGE RATEEXTERNALITYFACE VALUEFEMALE EDUCATIONFUNCTIONAL FORMGDPGDP PER CAPITAGROSS DOMESTIC PRODUCTGROWTH ACCOUNTINGGROWTH DEBATEGROWTH IMPACTGROWTH LITERATUREGROWTH MODELGROWTH MODELSGROWTH OF DEMANDGROWTH PROSPECTSGROWTH RATEGROWTH RATESGROWTH REGRESSIONGROWTH REGRESSIONSGROWTH THEORYHUMAN CAPITALINCOME REDISTRIBUTIONINDEPENDENT VARIABLEINDUSTRIALIZATIONINSTITUTIONAL ENVIRONMENTINVENTORYLABOR FORCELABOR MARKETLEARNINGLIVING STANDARDSMARGINAL RETURNMARGINAL RETURNSMEAN INCOMEMERIT GOODMODERN ECONOMIC GROWTHMONETARY ECONOMICSNATIONAL ACCOUNTSNATIONAL INCOMENEGATIVE EFFECTNEGATIVE EXTERNALITIESNEGATIVE IMPACTOPPORTUNITY COSTOUTPUT GROWTHOUTPUT PER CAPITAOUTPUT RATIOPER CAPITA INCOMEPOINT ESTIMATEPOLICY RESEARCHPOLITICAL ECONOMYPOLITICAL INSTABILITYPOSITIVE EXTERNALITIESPRIMARY EDUCATIONPRIMARY ENROLLMENTSPRIMARY SCHOOLPRIMARY SCHOOLINGPRODUCTION FUNCTIONPRODUCTION FUNCTIONSPRODUCTIVITY GROWTHPUBLIC ENTERPRISESPUBLIC POLICYPUBLIC SECTORPUPIL RATIORATE OF RETURNRATE OF RETURN TO CAPITALREADINGREAL WAGESREASONINGRELATIVE WAGERENT SEEKINGRETIREMENTRETURN TO EDUCATIONRETURNS TO EDUCATIONSCHOOL QUALITYSCHOOLINGSCHOOLING QUALITYSCHOOLSSECONDARY ENROLLMENTSECONDARY ENROLLMENT RATESSTANDARD DEVIATIONSTRUCTURAL BREAKTECHNICAL CHANGETECHNICAL PROGRESSTECHNOLOGICAL ADVANCESTECHNOLOGICAL PROGRESSTFPTOTAL FACTOR PRODUCTIVITYTOTAL LABOR FORCEUNEMPLOYMENTJournal ArticleWorld Bank10.1596/17434