Human capital and returns to scale

Paul Hansen (Department of Economics, University of Otago, Dunedin, New Zealand)
Stephen Knowles (Department of Economics, University of Otago, Dunedin, New Zealand)

Journal of Economic Studies

ISSN: 0144-3585

Publication date: 1 April 1998


Models of endogenous economic growth typically assume that aggregate production is characterised by increasing returns to scale, often as a result of the accumulation of physical and human capital. In this paper, an international data‐set on formal educational attainments is used to disaggregate total employment in order to estimate a Cobb‐Douglas aggregate production function. The function is estimated, using a pooled cross‐section time‐series model, for a selection of high income OECD countries for five years in the period 1960‐85. The estimation results suggest that increasing returns to scale prevailed.



Hansen, P. and Knowles, S. (1998), "Human capital and returns to scale", Journal of Economic Studies, Vol. 25 No. 2, pp. 118-123.

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Copyright © 1998, MCB UP Limited

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