The augmented Solow model with Mincerian schooling and externalities

Arbeitspapier

We combine the augmented Solow model with the Mincer equation to derive a specification that identifies an education externality within a production function framework. The previous empirical literature has not reached a consensus about the size of the education externality, which is given by the difference between the microeconomic and the macroeconomic return to education. Relative to our benchmark value that is based on a parameterization of the derived specification, we find that the estimated education externality is too large when the empirical model is not properly restricted, and appears to be absent when all control variables of the empirical model are properly accounted for. We note that the absence of an education externality would be inconsistent with observed levels education subsidies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Working Paper ; No. 1408

Classification and Topics

• Classification: Wirtschaft
• Subject: Education externalities ; Mincer equation ; Augmented Solow model ; Solow-Modell ; Externer Effekt ; Bildungsertrag ; Schätzung ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Carstensen, Kai ; Gundlach, Erich ; Hartmann, Susanne
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/4241
• Last update: 10.03.2025, 11:41 AM CET