Human capital in economic development: from labour productivity to macroeconomic impact

Hermannsson, K. and Lecca, P. (2016) Human capital in economic development: from labour productivity to macroeconomic impact. Economic Papers, 35(1), pp. 24-36. (doi: 10.1111/1759-3441.12126)

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Micro-econometric evidence reveals high private returns to education, most prominently in low-income countries. However, it is disputed to what extent this translates into a macro-economic impact. This paper projects the increase in human capital from higher education in Malawi and uses a dynamic applied general equilibrium model to estimate the resulting macroeconomics impact. This is contingent upon endogenous adjustments, in particular how labour productivity affects competitiveness and if this in turn stimulates exports. Choice among labour market assumptions and trade elasticities results in widely different outcomes. Appraisal of such policies should consider not only the impact on human capital stocks, but also adjustments outside the labour market.

Item Type:Articles
Additional Information:The author's acknowledge the financial support of the Icelandic International Development Agency.
Keywords:Human Capital; Economic Development; Higher Education; Labour Markets; Trade; Malawi.
Glasgow Author(s) Enlighten ID:Hermannsson, Professor Kristinn
Authors: Hermannsson, K., and Lecca, P.
Subjects:H Social Sciences > HB Economic Theory
L Education > L Education (General)
College/School:College of Social Sciences > School of Education
College of Social Sciences > School of Education > Educational Leadership & Policy
Research Group:Robert Owen Centre
Journal Name:Economic Papers
ISSN (Online):1759-3441
Published Online:05 January 2016
Copyright Holders:Copyright © 2016 The Economic Society of Australia
First Published:First published in Economic Papers 35(1):24-36
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher
Data DOI:10.5525/gla.researchdata.188

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