The Contribution of Schooling in Development Accounting: Results from a Nonparametric Upper Bound
How much would output increase if underdeveloped economies were to increase their levels of schooling? We contribute to the development accounting literature by describing a non-parametric upper bound on the increase in output that can be generated by more schooling. The advantage of our approach is that the upper bound is valid for any number of schooling levels with arbitrary patterns of substitution/complementarity. Another advantage is that the upper bound is robust to certain forms of endogenous technology response to changes in schooling. We also quantify the upper bound for all economies with the necessary data, compare our results with the standard development accounting approach, and provide an update on the results using the standard approach for a large sample of countries.
This paper has previously circulated under the title "A Note on Schooling in Development Accounting." We thank Marcelo Soto, Hyun Son, two anonymous referees, and very especially David Weil for useful comments. We also thank the Asian Development Bank for financial support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Caselli, Francesco & Ciccone, Antonio, 2013. "The contribution of schooling in development accounting: Results from a nonparametric upper bound," Journal of Development Economics, Elsevier, vol. 104(C), pages 199-211. citation courtesy of