"The Evolution of Education: A Macroeconomic Analysis"
with Diego Restuccia
June 2008
New Version - October 2008
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"The Evolution of Education: A Macroeconomic Analysis" New Version - October 2008 |
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Abstract:
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 per
worker to restrict technological progress. These restrictions imply substantial
skill-biased technical change (SBTC). We find that changes in relative earnings
through SBTC can explain the bulk of the increase in educational attainment. In
particular, a calibrated version of the model generates an increase in average
years of schooling of 48 percent compared to 27 percent in the data. This
strong effect of changes in relative earnings on educational attainment is
robust to relevant variations in the model and is consistent with empirical
estimates of the long-run income elasticity of schooling. We also find that the
substantial increase in life expectancy observed during the period contributes
little to the change in educational attainment in the model.
Keywords: educational attainment, schooling, skill biased technical progress, human capital.
JEL Classification Nos: E1, O3, O4.
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"The American Frontier: Technology versus Immigration" |
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Abstract:
How important was international immigration for the U.S. and its demography during the
nineteenth century? This paper investigates, quantitatively, its effect on the westward
movement of population and the regional and secular changes in fertility. Beside
immigration, two alternative forces are considered: technological progress and the land policy
(the Homestead Act). An optimal growth model with endogenous fertility and migration is
calibrated, and counterfactual experiments reveal that the main driving forces were productivity
growth and the declining cost of transportation. International immigration played a lesser role.
Keywords: Population growth, Migration, Fertility, Westward Expansion.
JEL Classification Nos: E1, J1, O1.
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"The U.S. Westward Expansion" |
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Discussion on Science Daily
Discussion on BioPact.com
Abstract:
The U.S. economic development in the nineteenth century was characterized by the westward movement of population and the accumulation of productive land in the West. This
paper presents a model of migration and land improvement to identify the quantitatively important forces driving this phenomena. Two forces are key: the decrease in transportation
costs induced the westward migration, while population growth was responsible for the investment in productive land.
Keywords: Westward Expansion, Land-improvement, Migration.
JEL Classification Nos: E1, J1, O1.
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"Trends in Hours: The U.S. from 1900 to 1950" |
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Abstract:
During the first half of the 20th century the length of the workweek in the United States declined, and its distribution across wage
deciles narrowed. The hypothesis is twofold. First, technological progress, through the rise in wages and the decreasing cost of
recreation, made it possible for the average U.S. worker to afford more time off from work. Second, changes in the wage distribution
explain the changes in the distribution of hours. A general equilibrium model is built to explore whether such mechanisms can
quantitatively account for the observations. The model is calibrated to the U.S. economy in 1900. It predicts 82% of the observed decline
in hours, and most of the contraction in their dispersion. The decline in the price of leisure goods accounts for seven percent of the
total decline in hours.
Keywords: Hours worked, leisure, home production, technological progress.
JEL Classification Nos: E24, J22, O11, O33.
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"A Quantitative Analysis of China's Structural Transformation" |
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Abstract:
Between 1978 and 2003 the Chinese economy experienced a remarkable 5.7 percent annual growth of GDP per labor. At the same time, there has been a noticeable transformation of
the economy: the share of workers in agriculture decreased from over 70 percent to less than 50 percent. We distinguish three sectors: private agriculture and nonagriculture and public
nonagriculture. A growth accounting exercise reveals that the main source of growth was TFP in the private nonagricultural sector. The reallocation of labor from agriculture to
nonagriculture accounted for 1.9 percent out of the 5.7 percent growth in output per labor. The reallocation of labor from the public to the private sector also accounted for a
significant part of growth in the 1996-2003 period. We calibrate a general equilibrium model where the driving forces are public investment and employment, as well as sectorial TFP
derived from our growth accounting exercise. We show that the key driving forces behind China's structural transformation are TFP growth in the private nonagriculural sector and public
capital accumulation.
Keywords: China, structural transformation, growth.
JEL Classification Nos: O41, O53.
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"Hours Worked (long-run trends)" |
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For 200 years the average number of hours worked per worker declined, both in the market place and in the home. Technological progress is the engine of such transformation. Three
mechanisms are stressed: (i) The rise in real wages and its corresponding wealth effect; (ii) The enhanced value of time off from work, due to the advent of time-using leisure goods; (iii)
The reduced need for housework, due to the introduction of time-saving appliances. These mechanisms are incorporated into a model of household production. The notion of
Edgeworth-Pareto complementarity/ substitutability is key to the analysis. Numerical examples link theory and data.
Keywords: Hours worked, leisure, housework, household production, Edgeworth-Pareto complementarity / substitutability, technological progress.
JEL Classification Nos: E24, J22, O11, O33.
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"The Baby Boom and Baby Bust" |
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Response to Bailey and Collins
The Baby Boom and Baby Bust in OECD Countries: Data and Graphs
Lecture Notes
Discussion by the Deutsche Bank Research Group
Abstract:
What caused the baby boom? And, can it be explained within the context of the secular decline in fertility that has occurred over the last 200 years? The hypothesis is that: (i) The
secular decline in fertility is due to the relentless rise in real wages that increased the opportunity cost of having children. (ii) The baby boom is explained by an atypical burst of
technological progress in the household sector that occurred in the middle of the last century. This lowered the cost of having children. A model is developed in an attempt to account,
quantitatively, for both the baby boom and bust.
Keywords: Baby boom, baby bust, fertility, technological progress.
JEL Classification Nos: E1, J1, O3.