Editing Economic growth (section)

===Human capital===
Many theoretical and empirical analyses of economic growth attribute a major role to a country's level of [[human capital]], defined as the skills of the population or the work force. Human capital has been included in both neoclassical and endogenous growth models.<ref>{{cite journal|last1=Mankiw|first1=N. Gregory|author-link=N. Gregory Mankiw|last2=Romer|first2=David|author-link2=David Romer|last3=Weil|first3=David|year=1992|title=A Contribution to the Empirics of Economic Growth|journal=[[Quarterly Journal of Economics]]|volume=107|issue=2|pages=407–37|doi=10.2307/2118477|jstor=2118477|citeseerx=10.1.1.335.6159|s2cid=1369978}}</ref><ref>{{cite journal|last1=Sala-i-Martin |first1=Xavier|last2=Doppelhofer|first2=Gernot|last3=Miller|first3=Ronald I.|year=2004|title=Determinants of Long-term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach|journal=[[American Economic Review]] |volume=94|issue=4|pages=813–35|doi=10.1257/0002828042002570|s2cid=55710066|url=http://www.nber.org/papers/w7750.pdf}}</ref><ref>{{cite journal|last=Romer|first=Paul|author-link=Paul Romer|year=1990|title=Human Capital and Growth: Theory and Evidence|journal=Carnegie-Rochester Conference Series on Public Policy|volume=32|pages=251–86|doi=10.1016/0167-2231(90)90028-J|s2cid=15491089|url=http://www.nber.org/papers/w3173.pdf}}</ref>

A country's level of human capital is difficult to measure since it is created at home, at school, and on the job. Economists have attempted to measure human capital using numerous proxies, including the population's level of literacy, its level of numeracy, its level of book production/capita, its average level of formal schooling, its average test score on international tests, and its cumulative depreciated investment in formal schooling. The most commonly-used measure of human capital is the level (average years) of school attainment in a country, building upon the data development of [[Robert Barro]] and Jong-Wha Lee.<ref>{{cite journal|last1=Barro|first1=Robert J. |last2=Lee|first2=Jong-Wha|year=2001|title=International Data on Educational Attainment: Updates and Implications|journal=Oxford Economic Papers|volume=53|issue=3|pages=541–63|doi=10.1093/oep/53.3.541|s2cid=30819754 |url=https://www.hks.harvard.edu/sites/default/files/centers/cid/files/publications/faculty-working-papers/042.pdf}}</ref> This measure is widely used because Barro and Lee provide data for numerous countries in five-year intervals for a long period of time.

One problem with the schooling attainment measure is that the amount of human capital acquired in a year of schooling is not the same at all levels of schooling and is not the same in all countries. This measure also presumes that human capital is only developed in formal schooling, contrary to the extensive evidence that families, neighborhoods, peers, and health also contribute to the development of human capital. Despite these potential limitations, Theodore Breton has shown that this measure can represent human capital in log-linear growth models because across countries GDP/adult has a log-linear relationship to average years of schooling, which is consistent with the log-linear relationship between workers' personal incomes and years of schooling in the [[Mincer earnings function|Mincer model]].<ref name="Theodore">{{cite journal|last=Breton|first=Theodore R.|year=2015|title=Higher Test Scores or More Schooling? Another Look at the Causes of Economic Growth|journal=[[Journal of Human Capital]]|volume=9|issue=2|pages=239–263 |url=http://repository.eafit.edu.co:80/bitstream/10784/2644/3/2013_34_Theodore_Breton.pdf |doi=10.1086/681911|hdl=10784/2644|s2cid=140069337|hdl-access=free}}</ref>

[[Eric Hanushek]] and Dennis Kimko introduced measures of students' mathematics and science skills from international assessments into growth analysis.<ref>{{cite journal|last1=Hanushek|first1=Eric A.|last2=Kimko|first2=Dennis D.|year=2000|title=Schooling, Labor Force Quality, and the Growth of Nations|journal=American Economic Review|volume=90|issue=5|pages=1184–208|doi=10.1257/aer.90.5.1184|citeseerx=10.1.1.232.7942}}</ref> They found that this measure of human capital was very significantly related to economic growth. Eric Hanushek and [[Ludger Wößmann]] have extended this analysis.<ref>{{cite journal|last1=Hanushek|first1=Eric A.|last2=Woessmann|first2=Ludger|year=2008 |title=The Role of Cognitive Skills in Economic Development|journal=Journal of Economic Literature|volume=46|issue=3|pages=607–68|doi=10.1257/jel.46.3.607|citeseerx=10.1.1.507.5325}}</ref><ref>{{cite journal|last1=Hanushek |first1=Eric A.|last2=Woessmann|first2=Ludger|year=2011|title=How Much Do Educational Outcomes Matter in OECD Countries?|journal=Economic Policy|volume=26|issue=67|pages=427–91|doi=10.1111/j.1468-0327.2011.00265.x|s2cid=7733555 |url=https://www.cesifo-group.de/DocDL/cesifo1_wp3238.pdf}}</ref> Theodore Breton shows that the correlation between economic growth and students' average test scores in Hanushek and Wößmann's analyses is actually due to the relationship in countries with less than eight years of schooling. He shows that economic growth is not correlated with average scores in more educated countries.<ref name="Theodore" /> Hanushek and Wößmann further investigate whether the relationship of knowledge capital to economic growth is causal. They show that the level of students' cognitive skills can explain the slow growth in Latin America and the rapid growth in East Asia.<ref>{{cite book|url=https://books.google.com/books?id=rIhLCAAAQBAJ|title=The Knowledge Capital of Nations: Education and the Economics of Growth|last1=Hanushek|first1=Eric|last2=Woessmann|first2=Ludger|publisher=[[MIT Press]]|year=2015|isbn=978-0-262-02917-9}}</ref>

[[Jörg Baten|Joerg Baten]] and [[Jan Luiten van Zanden]] employ book production per capita as a proxy for sophisticated literacy capabilities and find that "Countries with high levels of human capital formation in the 18th century initiated or participated in the industrialization process of the 19th century, whereas countries with low levels of human capital formation were unable to do so, among them many of today's Less Developed Countries such as India, Indonesia, and China."<ref>{{Cite journal|last1=Baten|first1=Joerg|last2=van Zanden|first2=Jan Luiten|date=2008|title=Book Production and the Onset of Modern Economic Growth|journal=Journal of Economic Growth|volume=13 | issue = 3 |pages=217–235|doi=10.1007/s10887-008-9031-9|hdl=10230/757|s2cid=195314801|hdl-access=free}}</ref>