TDPE Presents: Explaining Educational Attainment across Countries and over Time

Diego Restuccia Professor of Economics, University of Toronto In 1950, the difference in average years of schooling between rich and poor countries was 8-fold, and by 2005 it had declined to 2-fold yet the per-capita income gap did not decrease. What explains the educational attainment differences across countries and their evolution over time? We develop a model of human capital accumulation to quantitatively assess the importance of differences in productivity levels, life expectancy, and growth in explaining educational attainment across countries and over time. Calibrating the parameters of the model to reproduce the historical evolution of schooling and hours of work in the United States, we find that the model with only differences in productivity levels accounts for 30 percent of the difference in schooling between rich and poor countries in 1950. The model also accounts for 50 percent of the faster growth in schooling levels over time in poor relative to rich countries. When we allow for differences in life expectancy, the model accounts for close to 80 percent of the cross-country variation in schooling. Diego Restuccia is Professor of Economics at the University of Toronto.  He received his PhD in Economics from the University of Minnesota. His research investigates the role of productivity and human capital in explaining income differences across countries.  His work appears in, among others, the Quarterly Journal of Economics, Review of Economic Studies, and the American Economic Review.