Growth and Human Capital

This paper presents a new data set on human capital. It is based upon data released at the OECD for a subgroup of 38 member and non-member countries, and an effort performed at the Development Centre to expand this data set to other developing countries. The key to our methodology is to minimise the extrapolations and keep the data as close as possible to those directly available from national censuses (in the spirit of the work of De la Fuente and Doménech for OECD countries). We then use this new data set to test a neo-classical model in which human capital follows the Log-Linear formulation which is favoured by Mincerian approaches. We find both in levels and in first difference that the model performs extremely well. No externalities seem to manifest themselves, either on physical or on human capital accumulation. Total factor productivity (output net of the contribution of human and physical capital), however, do appear to be smaller, by about 45 per cent in average, in the ...