Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2004-04-13 Revision-Date: 2005-11-24 Number: 04-040/3 Author-Name: Miguel Portela Author-Email: firstname.lastname@example.org Author-Workplace-Name: Minho University Author-Name: Rob Alessie Author-Email: email@example.com Author-Workplace-Name: Utrecht University,Utrecht School of Economics Author-Name: Coen N. Teulings Author-Email: firstname.lastname@example.org Title: Measurement Error in Education and Growth Regressions Abstract: Published in The Scandinavian Journal of Economics", 112(3), 618-39.
The perpetual inventory method used for the construction of education data per country leads to systematic measurement error. This paper analyses the effect of this measurement error on GDP regressions. There is a systematic difference in the education level between census data and observations constructed from enrolment data. We discuss a methodology for correcting the measurement error. The standard attenuation bias suggests that using these corrected data would lead to a higher coefficient. Our regressions reveal the opposite. We discuss why the measurement error yields an overestimation. Our analysis contributes to an explanation of the difference between regressions based on 5 and on 10 year first-differences.
Classification-JEL: I2; O4 Keywords: growth; education; measurement error File-Url: http://papers.tinbergen.nl/04040.pdf File-Format: application/pdf File-Size: 254932 bytes Handle: RePEc:tin:wpaper:20040040