Theoretical Precursors

Theoretical Precursors

It is impossible to do justice to existing models of education and growth in a few

sentences, but we must identify some key precursors. Early on, Nelson and

Phelps (1966) argued that a more educated labor force would imitate frontier

technology faster. The further a state was from the frontier, the greater the

benefits of this catch-up. Benhabib and Spiegal (1994) expanded on their work,

arguing that a more educated labor force would also innovate faster. Lucas

(1988) and Mankiw, Romer, and Weil (1992) observed that the accumulation

of human capital could increase the productivity of other factors and thereby

raise growth. Notice that, at this point, we have separate arguments for why 5

the stock of human capital, the rate of accumulation of human capital, and

distance to the technological frontier should affect growth. Our model

coherently integrates all these strands, is the first to distinguish between types

of education spending, and is the first to consider the interplay between the

composition of spending and a state's distance from the frontier

In the Lucas and Mankiw, Romer, and Weil models, a state's rate of growth depends 5
on the rate of accumulation of human capital. Ha and Howitt (2005) point out that
such models are hard to reconcile with a state like that U.S., which has sustained
growth despite a slowing of its rate of accumulation of human capital.
See Barro and Sala-I-Martin (1991) and the many papers that cite it.