Report №8: Externalities to higher education: a review of the new growth literature
Опубликовано на портале: 15-07-2005
Статья представляет собой обзор различных вариантов моделирования внешних эффектов
высшего образования с точки зрения моделей роста и человеческого капитала. Большая
часть статьи посвящена также эмпирическому материалу по данной теме.
Models explaining the knowledge accumulation process typically assign a role to education
as an important input into a research sector which generates new knowledge. Firms
are assumed not to be able fully to appropriate the gains from the production of
knowledge so that spillovers occur (ie. knowledge is a 'public good').
- Recent advances in growth theory have brought into focus the role of education
in the creation of human capital, in the production of new knowledge, and the possibilities
of education-related externalities. In principle these externalities could be either
consumption or production related though it is only the latter which have been explored.
- New growth theories have proposed a number of mechanisms whereby education affects
productivity levels: education is important for successful research activities (eg.
by producing scientists and engineers) which are, in turn, important for productivity
growth; and education creates human capital which directly affects knowledge accumulation
and therefore productivity growth. Though higher education is not often modelled
explicitly in these theories there is a prima face case for higher education because
of its twin outputs of graduates typically embodying 3-6 years of post-16 education
and production-relevant research.
- New growth theories in which education generates human capital typically incorporate
at least one of two crucial assumptions: (i) that there are constant returns to all
(physical plus human) capital used in production (implying increasing returns to
all factors including 'raw' labour); and (ii) that there are positive externalities
to human capital in production. The empirical basis for these assumptions is essentially
unknown. If there are human capital externalities in production we should expect
to observe increasing returns to 'broad' (physical plus human) capital at the 'aggregate'
level. The aggregate here will depend on the pervasiveness of spillovers - whether
at the firm, industry, sector or economy-wide level.
The most direct evidence on HE externalities comes from comparisons of macro and
micro rate of return estimates. There are currently very few of the former, but present
evidence suggests, at most, very modest upward revisions of standard social rates
of return to account for externalities. The current 'best guess' at gross social
rates of return from the macro approach is 14%, which exceeds micro estimates for
males (around 11-13%) but falls short of those for females (around 16-19%).
- Countries with higher average years of education (including higher education
where appropriate) of their labour forces tend to grow faster, other things being
equal. There is some, tentative evidence that the magnitude of this effect observed
at the economy-wide level may exceed that observed at more micro levels indicating
- Other things being equal, OECD countries which expanded their higher education
more rapidly from 1960 experienced faster growth. The direction of causation however
- Education seems to be important more via its effects on productivity rather than
directly as a factor input.
- The only specific group of graduates which have been examined for productivity
growth effects are 'scientists and engineers' and results generally confirm positive
- There is some evidence that education affects physical capital investment in
the economy as a whole, which in turn raises income growth rates, though the specific
role of higher education in less clear in this process.
- There is increasing evidence that research and development activities may be
important for productivity growth and some of the gains from such activities spillover
to other firms and countries. The additional link from higher education to research
and development (R&D) is yet to be confirmed but some evidence is beginning to suggest
that HE may be important for the development of innovative research and the ability
to acquire and adopt it.
- Productivity advantages in 'leading' countries may take many years to spill over
to others so that there can be relatively long-run gains to countries which use their
education/research systems productively to generate new ideas or technologies. Within
countries, regionalised production is common, though not specific to 'new' industries.
If HE has a role to play in this process it is probably in sustaining rather than
initiating new industries in specific localities, via the provision of appropriate
labour skills. HE research does not appear to be primarily aimed at local firms,
though key local entrepreneurs sometimes originate in the local HE sector.