[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/boi/isrerv/v16y2018i1p1-40.html
   My bibliography  Save this article

The Development Of Education In Israel And Its Contribution To Long-Term Growth

Author

Listed:
  • Eyal Argov

    (Bank of Israel)

Abstract
This study discusses the contribution of human capital to Israel’s economic output and long-term growth. For this we built historical time series for Israel’s average years of schooling, while correcting individual data in order to account only for effective years of schooling, i.e. those that contribute to labor productivity. We find that in 2011 the average years of schooling among the prime working age (25–64) population was 13.5 years—in the center of the OECD distribution. Combining these data with estimates for the macroeconomic return on schooling allowed us to use Growth Accounting methods in order to estimate how increases in schooling contributed to growth. We found that the increase in schooling since the mid-1970s contributed 0.6–0.8 percentage points to the average annual growth rate, which is equivalent to 48–58 percent and 35–45 percent of the labor productivity and total per-capita GDP growth rates, respectively, during the period. However, the contribution of schooling to growth began to abate in the last decade, and it is expected to continue fading out: We conducted forecasts for the average years of schooling in the next 50 years, which point to the contribution to growth further declining, to 0.1–0.3 percentage points. The range partly reflects uncertainty regarding the Ultra-Orthodox population’s degree of integration in the effective education systems

Suggested Citation

  • Eyal Argov, 2018. "The Development Of Education In Israel And Its Contribution To Long-Term Growth," Israel Economic Review, Bank of Israel, vol. 16(1), pages 1-40.
    • Handle: RePEc:boi:isrerv:v:16:y:2018:i:1:p:1-40
    as

    Download full text from publisher

    File URL: https://boiwebrepec.azurefd.net/RePEc/boi/isrerv/IsER_16_2018_1_001-040.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
    2. Eyal Argov, 2018. "The Development Of Education In Israel And Its Contribution To Long-Term Growth," Israel Economic Review, Bank of Israel, vol. 16(1), pages 1-40.
    3. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    4. Philippe Aghion & Peter Howitt, 2009. "The Economics of Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012634, April.
    5. Sarit Cohen-Goldner & Zvi Eckstein, 2008. "Labor Mobility Of Immigrants: Training, Experience, Language, And Opportunities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(3), pages 837-872, August.
    6. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 1, number 1, June.
    7. Philippe Aghion & Diego Comin & Peter Howitt & Isabel Tecu, 2016. "When Does Domestic Savings Matter for Economic Growth?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(3), pages 381-407, August.
    8. Jérôme Vandenbussche & Philippe Aghion & Costas Meghir, 2006. "Growth, distance to frontier and composition of human capital," Journal of Economic Growth, Springer, vol. 11(2), pages 97-127, June.
    9. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    10. Amparo Castelló-Climent, 2010. "Channels through Which Human Capital Inequality Influences Economic Growth," Journal of Human Capital, University of Chicago Press, vol. 4(4), pages 394-450.
    11. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    12. Md. Rabiul Islam & James B. Ang & Jakob B. Madsen, 2014. "Quality-Adjusted Human Capital And Productivity Growth," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 757-777, April.
    13. Amparo Castello & Rafael Domenech, 2002. "Human Capital Inequality and Economic Growth: Some New Evidence," Economic Journal, Royal Economic Society, vol. 112(478), pages 187-200, March.
    14. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    15. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 2, number 2, June.
    16. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
    17. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    18. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    19. C. Kirabo Jackson & Rucker C. Johnson & Claudia Persico, 2016. "The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 157-218.
    20. Zvi Eckstein & Yoram Weiss, 2004. "On The Wage Growth of Immigrants: Israel, 1990-2000," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 665-695, June.
    21. Christian Morrisson & Fabrice Murtin, 2010. "The Kuznets Curve of Education: A Global Perspective on Education Inequalities," CEE Discussion Papers 0116, Centre for the Economics of Education, LSE.
    22. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    23. Andrea Bassanini & Stefano Scarpetta & Philip Hemmings, 2001. "Economic Growth: The Role of Policies and Institutions: Panel Data. Evidence from OECD Countries," OECD Economics Department Working Papers 283, OECD Publishing.
    24. Jens Matthias Arnold & Andrea Bassanini & Stefano Scarpetta, 2007. "Solow or Lucas?: Testing Growth Models Using Panel Data from OECD Countries," OECD Economics Department Working Papers 592, OECD Publishing.
    25. -, 2009. "Economic growth in the Caribbean," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38668, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    26. Romain Bouis & Romain Duval & Fabrice Murtin, 2011. "The Policy and Institutional Drivers of Economic Growth Across OECD and Non-OECD Economies: New Evidence from Growth Regressions," OECD Economics Department Working Papers 843, OECD Publishing.
    27. Peter J. Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michel Strawczynski, 2018. "Book Review: The Israeli Economy By Joseph Zeira," Israel Economic Review, Bank of Israel, vol. 16(1), pages 105-112.
    2. Eyal Argov, 2018. "The Development Of Education In Israel And Its Contribution To Long-Term Growth," Israel Economic Review, Bank of Israel, vol. 16(1), pages 1-40.
    3. Hazan, Moshe & Tsur, Shay, 2019. "Why is Labor Productivity in Israel so Low?," CEPR Discussion Papers 14011, C.E.P.R. Discussion Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Romain Bouis & Romain Duval & Fabrice Murtin, 2011. "The Policy and Institutional Drivers of Economic Growth Across OECD and Non-OECD Economies: New Evidence from Growth Regressions," OECD Economics Department Working Papers 843, OECD Publishing.
    2. Altinok, Nadir & Aydemir, Abdurrahman, 2017. "Does one size fit all? The impact of cognitive skills on economic growth," Journal of Macroeconomics, Elsevier, vol. 53(C), pages 176-190.
    3. Christian Morrisson & Fabrice Murtin, 2013. "The Kuznets curve of human capital inequality: 1870–2010," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(3), pages 283-301, September.
    4. repec:hal:spmain:info:hdl:2441/1ds77lna5j86jagcp29tfni72o is not listed on IDEAS
    5. repec:spo:wpmain:info:hdl:2441/1ds77lna5j86jagcp29tfni72o is not listed on IDEAS
    6. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
    7. Hanushek, Eric A., 2013. "Economic growth in developing countries: The role of human capital," Economics of Education Review, Elsevier, vol. 37(C), pages 204-212.
    8. Eric A. Hanushek & Jens Ruhose & Ludger Woessmann, 2017. "Knowledge Capital and Aggregate Income Differences: Development Accounting for US States," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 184-224, October.
    9. Lim, Jamus Jerome & Adams-Kane, Jonathon, 2008. "Institutions, Education, and Economic Performance," MPRA Paper 11800, University Library of Munich, Germany.
    10. Campbell, Susanna G. & Üngör, Murat, 2020. "Revisiting human capital and aggregate income differences," Economic Modelling, Elsevier, vol. 91(C), pages 43-64.
    11. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    12. Eric A. Hanushek & Jens Ruhose & Ludger Woessmann, 2015. "Economic Gains for U.S. States from Educational Reform," NBER Working Papers 21770, National Bureau of Economic Research, Inc.
    13. Amaghouss, Jabrane & Ibourk, Aomar, 2019. "Higher Education and Economic Growth: A Comparative Analysis of World Regions Trajectories," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 72(3), pages 321-350.
    14. Zhang, Xiaobei & Wang, Xiaojun, 2021. "Measures of human capital and the mechanics of economic growth," China Economic Review, Elsevier, vol. 68(C).
    15. Michael S. Delgado & Daniel J. Henderson & Christopher F. Parmeter, 2014. "Does Education Matter for Economic Growth?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(3), pages 334-359, June.
    16. Córdoba, Juan Carlos & Ripoll, Marla, 2013. "What explains schooling differences across countries?," Journal of Monetary Economics, Elsevier, vol. 60(2), pages 184-202.
    17. Glawe, Linda & Wagner, Helmut, 2020. "China in the middle-income trap?," China Economic Review, Elsevier, vol. 60(C).
    18. Jellal, Mohamed & Bouzahzah, Mohamed, 2012. "Gouvernance éducation et croissance économique [Governance education and economic growth]," MPRA Paper 38687, University Library of Munich, Germany.
    19. Rossi,Federico, 2018. "Human Capital and Macro-Economic Development : A Review of the Evidence," Policy Research Working Paper Series 8650, The World Bank.
    20. Wößmann, Ludger, 2000. "Specifying Human Capital: A Review, Some Extensions, and Development Effects," Kiel Working Papers 1007, Kiel Institute for the World Economy (IfW Kiel).
    21. Mohamed Jellal & Mohamed, Bouzahzah & Simplice A. Asongu, 2015. "Institutional Governance, Education and Growth," Research Africa Network Working Papers 15/059, Research Africa Network (RAN).
    22. Remi Jedwab & Paul Romer & Asif M. Islam & Roberto Samaniego, 2023. "Human Capital Accumulation at Work: Estimates for the World and Implications for Development," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(3), pages 191-223, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boi:isrerv:v:16:y:2018:i:1:p:1-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Yossi Yakhin (email available below). General contact details of provider: https://edirc.repec.org/data/boigvil.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.