The Role of Schooling in Struggling with the Middle-Income Trap: Dynamic Panel Data Analysis

Umit BULUT, Ahsen Seda BULUT

Abstract


Abstract. This paper aims at examining the relationship between average years of total schooling and GDP per capita for six middle-income countries over the period 1950-2010. To this end, the paper employs panel FMOLS and panel DOLS estimators and panel Granger causality test based on vector error correction model. According to the output from estimations, GDP per capita is positively related to average years of total schooling and there is a bidirectional causality between variables. In conclusion, the paper argues that average years of schooling of people should be increased to struggle with the middle-income trap.

Keywords. Middle-income trap, Human capital, Schooling, GDP per capita, Panel data analysis.

JEL. C23, I25, O15.


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References


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DOI: http://dx.doi.org/10.1453/jsas.v2i4.587

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