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The importance of cognitive skills in macroeconomic models of growth and development

Gerba, Eddie and Pikoulakis, Emmanuel V. (2014) The importance of cognitive skills in macroeconomic models of growth and development. Working papers series, 10.2139/ssrn.2445882. Social Sciences Research Network.

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Identification Number: 10.2139/ssrn.2445882

Abstract

In a highly influential and thought provoking study, Hanushek, E.A., and Woessmann, L., (NBER Working Paper No.14633, 2009) provide evidence in favor of a strong causal effect of cognitive skills on growth. To quote: “… the simple premise that improving the schools can produce benefits in national growth rates is strongly supported”. Whilst we concur with this premise, we are rather sceptical whether the Mincerian approach followed by Hanushek and Woessmann (op.cit.) can sufficiently account for the contribution of cognitive skills on national growth rates. To further explore the importance of cognitive skills on growth and development we revisit macroeconomic models where cognitive skills are the key determinant of the path of human capital and its rate of accumulation. Our empirical results strongly support the workings of a “learning-by-doing” hypothesis where cognitive skills together with physical capital determine the paths of human capital, of output per worker, and growth.

Item Type: Monograph (Working Paper)
Official URL: http://www.ssrn.com/en/
Additional Information: © 2014 The Authors
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification: O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources; Human Development; Income Distribution; Migration
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence
Sets: Departments > European Institute
Collections > Economists Online
Date Deposited: 23 Jun 2014 14:47
Last Modified: 04 Jul 2014 16:03
URI: http://eprints.lse.ac.uk/id/eprint/57207

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