1. Impact of Education on Labor Efficiency.
- Author
-
Diwan, Romesh K.
- Subjects
ECONOMIC development ,LABOR ,INDUSTRIAL productivity ,UNITED States education system ,INDUSTRIAL efficiency ,EDUCATION ,PRODUCTION (Economic theory) - Abstract
A large amount of literature on the theory of economic growth has been preoccupied with a variety of growth models analysing somewhat artificial problems by employing a high level of abstraction. Some attempts, however, have been made to add contents to these boxes. The empiricists have been interested mainly in the fundamental problem of identifying quantitatively the sources of productivity growth. Initially these studies were restricted to the contributions of the classical inputs: i.e., labor and capital in physical quantities. The results suggested that the contribution of these classical inputs was not quantitatively large. A large residual remained to be explained. To account for this large residual, research moved into two somewhat different directions. On the one hand, qualitative aspects of the classical inputs were subjected to quantitative analysis. On the other, new factors, such as 'education' and 'research and development' were introduced into the framework. Few efforts have been made to develop an explicit relationship between these two approaches. The present paper is an attempted marriage, one hopes a happy and contagious one, between the qualitative aspects of the classical inputs and the new exogeneous factor. Accordingly, we provide a quantitative estimate of the impact of education, (education defined in terms of school years) on the efficiency of labor. The finding is that this impact is positive, and the elasticity of labor efficiency with respect to schooling is around 1.6. The plan of the paper is as follows. We first outline a generalized production function. In Section 2 a labor efficiency education function is developed which defines the impact of education on labor efficiency. Section 3 outlines the model and analyses the conditions for identification. An empirical estimate based on time series data for the United States non-farm sector is presented in Section 4. We postulate a general production function, namely, x[sub 0, sup -p =... [ABSTRACT FROM AUTHOR]
- Published
- 1971
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