Chapter

Ideas and Education

Steve Dowrick

in Growth and Productivity in East Asia

Published by University of Chicago Press

Published in print August 2004 | ISBN: 9780226386805
Published online February 2013 | e-ISBN: 9780226387079 | DOI: http://dx.doi.org/10.7208/chicago/9780226387079.003.0002
Ideas and Education

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The importance of human capital for economic growth was highlighted in much of the “new growth theory” that came to prominence in the late 1980s and early 1990s. The neoclassical growth model, formalized three decades earlier, had focused on the accumulation of machinery and equipment and emphasized the feature of diminishing returns—which implied that such investment would not be able to drive long-run growth. The new generation of studies switched attention to the accumulation of human capital and the possibility that returns to investment in education, training, and research may not suffer from diminishing returns. This chapter examines market-related returns to human capital, focusing on the experience of Australia. It reviews and evaluates evidence from recent theoretical and econometric studies relating economic growth to investment in both embodied and disembodied human capital. The chapter focuses on the empirical front to the relatively well-documented areas of investment in formal schooling and research and development. It also discusses the role of knowledge in economic growth, endogenous growth theory, the ideas of Robert Solow, and Australia's educational attainment report.

Keywords: economic growth; education; Australia; human capital; knowledge; research and development; endogenous growth theory; educational attainment; Robert Solow

Chapter.  13035 words.  Illustrated.

Subjects: Business and Management

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