This paper proposes an endogenous growth model where human capital can be transferred across countries via foreign education. Importing knowledge by students abroad improves a developing country"s chance of catching up. An excessively wide difference in knowledge, however, can hamper the chance because few students can afford foreign education. Considering these two forces, the relationship between income growth in a developing country and income gap takes an inverted-U schedule. The model also predicts an endogenous threshold level of income gap which separates catching-up and falling-behind. We test the model"s propositions and estimate the threshold using international panel data.
This paper proposes an endogenous growth model where human capital can be transferred across countries via foreign education. Importing knowledge by students abroad improves a developing country"s chance of catching up. An excessively wide difference in knowledge, however, can hamper the chance because few students can afford foreign education. Considering these two forces, the relationship between income growth in a developing country and income gap takes an inverted-U schedule. The model also predicts an endogenous threshold level of income gap which separates catching-up and falling-behind. We test the model"s propositions and estimate the threshold using international panel data.
(0)
(0)