Contents

Abstract 680

1. Introduction 681

2. The measure of our ignorance 683

2.1. Basicdata 685

2.2. Basicmeasuresofsuccess 686

2.3. Alternative measures used in the literature 688

2.4.

3. Robustness:basic stuff 690

3.1. Depreciation rate 690

3.2. Initial capital stock 691

3.3. Education-Wageprofile 693

3.4. Years of education 1 694

3.5. Years of education 2 694

3.6. Hours worked 695

3.7. Capital share 696

4. Quality of human capital 698

4.1. Quality of schooling: Inputs 698

4.1.1. Teachers’human capital 699

4.1.2. Pupil-teacher ratios 701

4.1.3. Spending 702

4.2. Quality of schooling: test scores 703

4.3. Experience 706

4.4. Health 708

4.5. Social vs. private returns to schooling and health 710

5. Quality of physical capital 711

5.1. Composition 711

5.2. Vintage effects 715

5.3. Furtherproblemswith K 716

A data set is posted at http://econ.lse.ac.uk/staff/caselli_francesco/.

Handbook of Economic Growth, Volume 1A. Edited by Philippe Aghion and StevenN. Durlauf © 2005ElsevierB.V All rights reserved

DOI: 10.1016∕S1574-0684(05)01009-9

6. SectorialdifferencesinTFP 717

6.1. Industry studies 718

6.2. Theroleofagriculture 719

6.3. Sectorial composition and development accounting 724

7. Non-neutral differences in technology 727

7.1. Basic concepts and qualitative results 727

7.2. Development accounting with non-neutral differences 734

8. Conclusions 737

Acknowledgements 738

References 738