More evidence on the role of secondary education in the development of lower-income countries: Wishful thinking or useful knowledge?

Economic Development and Cultural Change

Volumn 48, Issue 1, 1999, Pages 155-175

  Brist, Lonnie E ^a   Caplan, Arthur J ^b  

^a UNIVERSITY OF ALABAMA   (United States)

^b WEBER STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ECONOMIC DEVELOPMENT; EDUCATION; RETURNS TO EDUCATION;

EID: 0033380160     PISSN: 00130079     EISSN: None     Source Type: Journal    
DOI: 10.1086/452450     Document Type: Article

References (37)

1. Robert E. Lucas, "On the Mechanics of Economic Development," Journal of Monetary Economics 22 (June 1988): 3-42.
2. Assaf Razin, "Economic Growth and Education: New Evidence," Economic Development and Cultural Change 25, no. 2 (January 1979): 317-24; Dale C. Jorgenson and Zvi Griliches, "The Explanation of Productivity Change," Review of Economic Studies 34 (1967): 249-83; and Theodore W. Schultz, "Education and Economic Growth," in Social Forces Influencing American Education, ed. N. B. Henry (Chicago: University of Chicago Press, 1961).
3. Assaf Razin, "Economic Growth and Education: New Evidence," Economic Development and Cultural Change 25, no. 2 (January 1979): 317-24; Dale C. Jorgenson and Zvi Griliches, "The Explanation of Productivity Change," Review of Economic Studies 34 (1967): 249-83; and Theodore W. Schultz, "Education and Economic Growth," in Social Forces Influencing American Education, ed. N. B. Henry (Chicago: University of Chicago Press, 1961).
4. Assaf Razin, "Economic Growth and Education: New Evidence," Economic Development and Cultural Change 25, no. 2 (January 1979): 317-24; Dale C. Jorgenson and Zvi Griliches, "The Explanation of Productivity Change," Review of Economic Studies 34 (1967): 249-83; and Theodore W. Schultz, "Education and Economic Growth," in Social Forces Influencing American Education, ed. N. B. Henry (Chicago: University of Chicago Press, 1961).
5. Noel Gaston and Jaime Tengo, "Educational Attainment and Earnings Determination in Colombia," Economic Development and Cultural Change 41, no. 1 (October 1992): 125-39; Terry D. Monson, "Educational Returns in the Ivory Coast," Journal of Developing Areas 13, no. 4 (June 1979): 415-30; and Joshua D. Angrist, "The Economic Returns to Schooling in the West Bank and Gaza Strip," American Economic Review 85, no. 5 (December 1995): 1065-87.
6. Noel Gaston and Jaime Tengo, "Educational Attainment and Earnings Determination in Colombia," Economic Development and Cultural Change 41, no. 1 (October 1992): 125-39; Terry D. Monson, "Educational Returns in the Ivory Coast," Journal of Developing Areas 13, no. 4 (June 1979): 415-30; and Joshua D. Angrist, "The Economic Returns to Schooling in the West Bank and Gaza Strip," American Economic Review 85, no. 5 (December 1995): 1065-87.
7. Noel Gaston and Jaime Tengo, "Educational Attainment and Earnings Determination in Colombia," Economic Development and Cultural Change 41, no. 1 (October 1992): 125-39; Terry D. Monson, "Educational Returns in the Ivory Coast," Journal of Developing Areas 13, no. 4 (June 1979): 415-30; and Joshua D. Angrist, "The Economic Returns to Schooling in the West Bank and Gaza Strip," American Economic Review 85, no. 5 (December 1995): 1065-87.
8. Christopher Colclough, "The Impact of Primary Schooling on Economic Development," World Development 10, no. 3 (March 1982): 167-85.
9. Monson bases this evidence on findings that returns to investments in education in the Ivory Coast peak on completion of secondary school, then fall precipitously for university education.
10. N. R. Venzetti and J. E. Bessell, "Education and the Development of Farming in Two Areas of Zambia," Journal of Development Studies 11, no. 1 (October 1974): 41-54. More general findings supporting this argument are contained in John Simmons, "Education for Development Reconsidered," World Development 7, no. 12 (December 1979): 1005-16.
11. N. R. Venzetti and J. E. Bessell, "Education and the Development of Farming in Two Areas of Zambia," Journal of Development Studies 11, no. 1 (October 1974): 41-54. More general findings supporting this argument are contained in John Simmons, "Education for Development Reconsidered," World Development 7, no. 12 (December 1979): 1005-16.
12. K. Subbarao and Laura Raney, "Social Gains from Female Education: A Cross-National Study," Economic Development and Cultural Change 44, no. 1 (October 1995): 105-28.
13. Robert J. Barro and Jong-Wha Lee, "Sources of Economic Growth," Carnegie-Rochester Conference Series on Public Policy 40 (1994): 1-46. Barro and Lee discriminate between "fast" and "slow" growers and, using a panel data set with only two time periods, control for a wide range of influences, including a convergence effect, gross domestic investment, relative size of central government in both the domestic and import and export sectors, educational and health attainment, and political instability. The time series mean and standard deviation of our sample's real per capita growth rate (0.89% and 0.21%, respectively) puts our sample very near their slow-grower classification. Several of their results are contrasted with ours in Section V.
14. Nancy Birdsall and Juan Luis Londono, "Asset Inequality Matters: An Assessment of the World Bank's Approach to Poverty Reduction," American Economic Review 87, no. 2 (May 1997): 32-37. Birdsall and Londono find that using alternative measures of asset inequality restores the negative relationship between inequality and growth for Latin American countries.
15. Albert Fishlow, "Inequality, Poverty, and Growth: Where Do We Stand?" Annual World Bank Conference on Development Economics (Washington, D.C.: International Bank for Reconstruction and Development/World Bank, 1995), pp. 25-39. Fishlow's main goal is to establish the relationship between income distribution and growth using a more recent data set than had been used in earlier studies. He is able to overturn the results of these earlier studies that income inequality explains economic growth. Erich Weede ("Income Inequality, Democracy, and Growth Reconsidered," European Journal of Political Economy 13 [1997]: 751-64) also finds conflicting results regarding income inequality.
16. Albert Fishlow, "Inequality, Poverty, and Growth: Where Do We Stand?" Annual World Bank Conference on Development Economics (Washington, D.C.: International Bank for Reconstruction and Development/World Bank, 1995), pp. 25-39. Fishlow's main goal is to establish the relationship between income distribution and growth using a more recent data set than had been used in earlier studies. He is able to overturn the results of these earlier studies that income inequality explains economic growth. Erich Weede ("Income Inequality, Democracy, and Growth Reconsidered," European Journal of Political Economy 13 [1997]: 751-64) also finds conflicting results regarding income inequality.
17. Real official net transfers captures the effect of foreign aid in this model, and our trade variable is a general measure of "openness." Although treated as time variant in theory, data on income inequality are not rich enough to allow for the variance through time in our empirical tests. Instead, we treat income inequality as a grouped fixed effect, a procedure discussed in detail in Section IV. Specific time lags j for each variable are also discussed further in Section IV.
18. kk for each variable k are discussed in more detail below.
19. We also assume that the first and second partial derivatives for the functions φ and τ, respectively, are well defined.
20. By definition, then, each of these regression coefficients is a structural parameter. As such, we are able to determine the net impact of the regression variables on development as well as the precise way in which they do so.
21. World Bank Development Reports (Washington, D.C.: World Bank, 1985-93); World Tables (Washington, D.C.: World Bank, 1985-93); World Development Indicators (Washington, D.C.: World Bank, 1997); Klaus Deininger and Lyn Squire, "A New Data Set Measuring Income Inequality," World Bank Economic Review 10, no. 3 (1996): 565-91, for a discussion of the quality of data used in these earlier studies.
22. World Bank Development Reports (Washington, D.C.: World Bank, 1985-93); World Tables (Washington, D.C.: World Bank, 1985-93); World Development Indicators (Washington, D.C.: World Bank, 1997); Klaus Deininger and Lyn Squire, "A New Data Set Measuring Income Inequality," World Bank Economic Review 10, no. 3 (1996): 565-91, for a discussion of the quality of data used in these earlier studies.
23. World Bank Development Reports (Washington, D.C.: World Bank, 1985-93); World Tables (Washington, D.C.: World Bank, 1985-93); World Development Indicators (Washington, D.C.: World Bank, 1997); Klaus Deininger and Lyn Squire, "A New Data Set Measuring Income Inequality," World Bank Economic Review 10, no. 3 (1996): 565-91, for a discussion of the quality of data used in these earlier studies.
24. World Bank Development Reports (Washington, D.C.: World Bank, 1985-93); World Tables (Washington, D.C.: World Bank, 1985-93); World Development Indicators (Washington, D.C.: World Bank, 1997); Klaus Deininger and Lyn Squire, "A New Data Set Measuring Income Inequality," World Bank Economic Review 10, no. 3 (1996): 565-91, for a discussion of the quality of data used in these earlier studies.
25. For a listing of the specific countries in our sample, see the appendix.
26. FERT, LE, and en were each taken from various issues of World Development reports; H was taken from the World Tables; and RGDP, GE, POP, GDI, FDI, and TR were taken from the World Development Indicators 1997 CD-Rom.
27. FERT, LE, and en were each taken from various issues of World Development reports; H was taken from the World Tables; and RGDP, GE, POP, GDI, FDI, and TR were taken from the World Development Indicators 1997 CD-Rom.
28. Deininger and Squire report updated measures of income inequality that are averaged over various years for each country. The reported values depend on the quality of surveys performed in each country, as well as when they were administered.
29. Razin (n. 2 above) used the same index method to calculate his economic growth variable. In order to conform to his analysis we use his method identically.
30. We also tested several functional forms to account for nonlinearities in the relationships between our independent and dependent variables (e.g., double-log, semi-log, etc.). However, none of these transformations added significant explanatory power to our regressions.
31. We tested a variety of enrollment lag lengths, including 1-, 2-, 3-, 4-, 5-, 6-, and 7-period lags. Our data set allowed for at most a 7-year lag in enrollment, at which time the sample size became too small for inference procedures.
32. We found that use of any of the three income-inequality measures mentioned above did not change appreciably the empirical results. Thus, we report results using average Gini ratios as our measure of income inequality across countries. The grouping of countries with "high" Gini ratios (from 0.50 to 0.57) is the omitted dummy. Thus, coefficient estimates on the two included groupings ("medium" from 0.40 to 0.49 and "low" from 0.27 to 0.39) are relative to the omitted grouping.
33. Both the Subbarrao and Raney (n. 7 above) and Barro and Lee (n. 8 above) studies are confined to estimating the level of fertility, rather than fertility growth.
34. This result fits well with arguments made in the policy literature re-garding foreign aid during the 1980s. For examples of this literature, see Edward Clay, "The Decline of Food Aid: Issues of Aid Policy, Trade, and Food Security," in Market Forces and World Development, ed. Renee Prendergast and Frances Stewart (New York: St. Martin's Press, 1994), which discusses the role of food aid in Africa. Einar Magnussen, "What Role for Aid Objectives?" Forum for Development Studies 5, no. 2 (1996): 115-47; Carol Graham and Michael O'Hanlon, "Making Foreign Aid Work," Foreign Affairs 76, no. 4 (July-August 1997): 96-104; and Mark Duffield, "Humanitarian Intervention, the New Aid Paradigm and Separate Development," New Political Economy 2, no. 2 (1997): 336-40, each provide brief summaries of the role of foreign aid in general during the 1980s.
35. This result fits well with arguments made in the policy literature re-garding foreign aid during the 1980s. For examples of this literature, see Edward Clay, "The Decline of Food Aid: Issues of Aid Policy, Trade, and Food Security," in Market Forces and World Development, ed. Renee Prendergast and Frances Stewart (New York: St. Martin's Press, 1994), which discusses the role of food aid in Africa. Einar Magnussen, "What Role for Aid Objectives?" Forum for Development Studies 5, no. 2 (1996): 115-47; Carol Graham and Michael O'Hanlon, "Making Foreign Aid Work," Foreign Affairs 76, no. 4 (July-August 1997): 96-104; and Mark Duffield, "Humanitarian Intervention, the New Aid Paradigm and Separate Development," New Political Economy 2, no. 2 (1997): 336-40, each provide brief summaries of the role of foreign aid in general during the 1980s.
36. This result fits well with arguments made in the policy literature re-garding foreign aid during the 1980s. For examples of this literature, see Edward Clay, "The Decline of Food Aid: Issues of Aid Policy, Trade, and Food Security," in Market Forces and World Development, ed. Renee Prendergast and Frances Stewart (New York: St. Martin's Press, 1994), which discusses the role of food aid in Africa. Einar Magnussen, "What Role for Aid Objectives?" Forum for Development Studies 5, no. 2 (1996): 115-47; Carol Graham and Michael O'Hanlon, "Making Foreign Aid Work," Foreign Affairs 76, no. 4 (July-August 1997): 96-104; and Mark Duffield, "Humanitarian Intervention, the New Aid Paradigm and Separate Development," New Political Economy 2, no. 2 (1997): 336-40, each provide brief summaries of the role of foreign aid in general during the 1980s.
37. This result fits well with arguments made in the policy literature re-garding foreign aid during the 1980s. For examples of this literature, see Edward Clay, "The Decline of Food Aid: Issues of Aid Policy, Trade, and Food Security," in Market Forces and World Development, ed. Renee Prendergast and Frances Stewart (New York: St. Martin's Press, 1994), which discusses the role of food aid in Africa. Einar Magnussen, "What Role for Aid Objectives?" Forum for Development Studies 5, no. 2 (1996): 115-47; Carol Graham and Michael O'Hanlon, "Making Foreign Aid Work," Foreign Affairs 76, no. 4 (July-August 1997): 96-104; and Mark Duffield, "Humanitarian Intervention, the New Aid Paradigm and Separate Development," New Political Economy 2, no. 2 (1997): 336-40, each provide brief summaries of the role of foreign aid in general during the 1980s.