Growth in emerging economies: Is there a role for education?

We study the relationship between human capital and growth using a model which encompasses previous specifications and estimates the short and the long-run effects of human capital accumulation. We adopt an empirical framework which accounts for countries' heterogeneity and cross-sectional dependence in a dynamic panel. Results for a sample of 14 Asian countries reveal a large and positive long-run impact of human capital on growth in the 1960-2013 period. Looking at different types of education we find that the diffusion of primary and secondary education has a positive long-run impact, while the long-run effect of tertiary education is negative. Low proportion of people educated at the tertiary level, lack of opportunities for highly educated workers and the brain drain phenomenon could explain this result. These results support policies directed towards increasing investments in primary and secondary education rather than focusing on a minority educated at the tertiary level.