The rise in returns to education and the decline in household savings
In: Journal of economic dynamics & control, Band 32, Heft 2, S. 436-469
ISSN: 0165-1889
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In: Journal of economic dynamics & control, Band 32, Heft 2, S. 436-469
ISSN: 0165-1889
In: Journal of development economics, Band 77, Heft 2, S. 441-466
ISSN: 0304-3878
In: World development: the multi-disciplinary international journal devoted to the study and promotion of world development, Band 133, S. 1-19
World Affairs Online
In: World Development, Forthcoming
SSRN
Working paper
SSRN
Working paper
In: States and Development, S. 69-91
In: Journal of Macroeconomics, Forthcoming
SSRN
Working paper
SSRN
Working paper
In: Economica, Band 75, Heft 300, S. 629-661
ISSN: 1468-0335
This paper provides a framework that decomposes aggregate total factor productivity (TFP) into a component reflecting relative efficiency across sectors, and another component that reflects the absolute level of efficiency. A development accounting analysis suggests that as much as 85% of the international variation in aggregate TFP can be attributed to variation in relative efficiency across sectors. Estimation results show that recent findings highlighting the importance of strong protection of property rights, financial development and geographical advantage for the level of TFP, can be explained by their impact on relative efficiency.
SSRN
In: Cliometrica: journal of historical economics and econometric history, Band 2, Heft 1, S. 19-48
ISSN: 1863-2513
We construct an overlapping generations model to study the effect of capital controls on human capital investments and the incidence of redistributive politics in a growing economy. We argue that the conventional wisdom linking higher capital controls to lower growth is reproduced only when an economy is sufficiently developed. For under-developed countries, higher capital controls are beneficial for human capital accumulation suggesting that the wisdom does not apply. In an augmented version of the model, we show that a modern sector, characterized by positive levels of investment in education, may not exist unless capital controls are sufficiently high. In particular, higher capital controls make it feasible for a modern sector to exist by lowering the threshold income level required by workers to invest in human capital. These results are consistent with recent evidence suggesting that capital account liberalization positively affects growth only after a country has achieved a certain threshold level of absorptive capacities.
BASE
We study the effect of capital controls on the level of investment in human capital and the resulting growth path of an economy. The economy consists of two groups of agents based on the ownership of factors of production. One type of agents – called workers – own human capital and bequeath education to their offsprings. The other group of agents – called capitalists – own and bequeath physical capital. The workers have the political power to tax capital income. The capitalists, based on the tax rate imposed by the workers and the capital control regime in place, decide to invest part or all of their capital abroad. We characterize the optimal tax behavior of the workers. We find that higher capital controls are beneficial for investment in education whenever there is capital flight in a steady state equilibrium. However, higher capital controls are shown to have no effect on the tax rate on capital income imposed by workers: rather, they act as a disincentive for capital flight by lowering the return from foreign investment. We show that lowering capital controls can lead to higher growth only when there is no capital flight in the steady state. Importantly, to prevent capital flight in the long run, human capital accumulation must not show decreasing returns with respect to education and the economy must be sufficiently developed.
BASE
In: NBER working paper series 12522
In: Journal of development economics, Band 91, Heft 2, S. 242-256
ISSN: 0304-3878