Abstract
This chapter empirically explores how institutions, human capital and gender interact and together influence growth. Our contribution is based on the threshold regression model by Hansen (Econometrica, 68, 575–603, 2000) in the version by Kourtellos et al. (2016), which allows for endogeneity in the threshold variable. Through all our regressions the dependent variable is per capita GDP growth, while human capital, disaggregated by gender, is the threshold variable. Results confirm the presence of non-linearities in the relationship between human capital and growth, while showing the importance that institutions and gender have on it. Findings also suggest that female education has a direct effect on GDP growth, while male education has an indirect effect, which is linked to institutional quality.
We would like to thank an anonymous referee for very helpful comments on an earlier draft that helped improve the current version.
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Notes
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- 2.
If a first threshold is proven to exist, tests for the presence of a second threshold also reject the null-hypothesis in all cases presented in this chapter. These supplementary results provide further evidence to confirm the non-linear relationship between human capital and growth. Similarly, the additional estimated coefficients for human capital reflect the qualitative findings obtained in the first round of threshold estimations. As these results align with and confirm those presented in the rest of the chapter they have been omitted from the presentation for the sake of brevity.
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These are: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of law, and Control of Corruption.
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Pelloni, A., Stengos, T., Valenti, F. (2019). The Non-linearity in the Relationship Between Human Capital and Growth. In: Bucci, A., Prettner, K., Prskawetz, A. (eds) Human Capital and Economic Growth. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-21599-6_1
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