Does Education Raise Productivity, or Just Reflect it

Bibliographic Data

ID9715173
AuthorsArnaud Chevalier (0000-0001-9166-7465, University of Kent and London School of Economics), Colm Harmon (0000-0003-2206-7639, University College Dublin and Centre for Economic Policy Research), Ian Walker (0000-0002-0079-3149, University of Warwick and Institute for Fiscal Studies), Yu Zhu (0000-0003-1360-0753, University of Kent)
Year2004
Volume114
Issue499
PagesF499-F517
Publication date2004-11-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2004.00256.x
OpenAlexW2157868974
LanguageEN
Citations received28
References cited25

Education has an important effect on wages but it not clear whether this is because education raises productivity or because education is simply a signal of ability. We implement a number of existing tests for discriminating between these two explanations and find that they do not support the signalling hypothesis. However, we have severe reservations about these results and we propose an alternative test based on changes in education incentives caused by changes in the minimum school leaving age in the 1970s. Using this idea we find that UK data appear to strongly support the human capital explanation. Copyright 2004 Royal Economic Society

Capital (architecture · Economic growth · Economics · Geography · Human capital · Incentive · Labour economics · Microeconomics · Productivity · Signalling · Test (biology · Fiscal Policy and Economic Growth · Intergenerational and Educational Inequality Studies · Labor market dynamics and wage inequality

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