A Study on the effect of education participation on total factor of productivity
Endogenous growth model opens up a channel to linkage between education and economic growth. However, the effect of education is difficult to capture, as it influences economy through direct and indirect channels. Average years of schooling are commonly employed as a proxy for human capital. However, it may only showthepartial effect of education on economy as it reflects aggregated education level without considering the cohort effect. In order to explore the cohort effect of education on economy, this study takes the measurement of the completion rate of primary and lower secondary education. The data captures increasing participation in basic education overtime, and increase of education completion rate among cohort may have a positive influence n Total Factor of Productivity (TFP) growth. The author analyzes the relationship between education completion rate of primary and lower secondary education, and TFP growth rate by using worldwide panels from 1970to 2000 covering 60to 71countries. While only secondary education shows a positive impact on TFP growth, both primary and secondary education completion rates are positively associated with technical efficiency change (imitation). The result implies that basic education contributes to productivity growth through accelerating adaptionof technology.
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