The Evolution of Education: A Macroeconomic Analysis
-Money Macro Seminar
Joint with: Diego Restuccia
Between 1940 and 2000 there has been a substantial increase of educational attainment in the United States. What caused this trend? We develop a model of schooling decisions in order to assess the quantitative contribution of technological progress in explaining the evolution of education. We use earnings across educational groups and growth in gross domestic product (GDP) per worker to restrict technological progress. These restrictions imply substantial skill-bias technical change. We find that skill-bias technical change can explain the bulk of the increase in educational attainment. In particular, a version of the model calibrated to data in 2000 and that includes on-the-job human capital accumulation is able to generate 2/3 of the increase in educational attainment observed
in the data. We also find that the substantial increase in life expectancy observed during the period accounts for almost none of the change in educational attainment.
For more information, contact Dirk Krueger.