Effects of male and female education on economic growth: Some evidence from Asia

Highlights

• We estimate growth effects of gender disaggregated and level-specific enrolment ratios in a panel of Asian economies.

• We use the extreme bounds analysis (EBA) to estimate our model.

• Using both endogenous and exogenous growth model, we find differential growth effects based on gender.

• The growth effect varies according to which model used.

Abstract

We use extreme bounds analysis (EBA) to examine the comparative growth effects of gender disaggregated and level-specific enrolment ratios in a panel of Asian economies. To test our hypotheses, we employ both endogenous and exogenous growth frameworks. The externality effects of education are positive and robust for both males and females and are relatively large and significant at primary, secondary and tertiary levels. The results are suggestive of a gender productivity gap. Asian economies can grow faster by investing more in female education.

Introduction

This paper examines the long run growth effects of education using a panel of eighteen Asian countries over the period 1970–2009. The economic benefit of improving education for all is significant, as a more educated society translates into higher rates of economic growth. This is evidenced by the large literature that has emerged on education and economic growth: see Mankiw, Romer, and Weil (1992), Barro (1991), Hanushek (1995), Temple (2000), Krueger and Lindahl (2001), Gemmel (1996), Benhabib and Spiegel (1994) and Dowrick (1995) among others.

Given the current emphasis on education by the United Nations, and the second Millennium Development Goal (MDG) of achieving education for all by increasing enrolment ratios, this study takes a gender-disaggregated and level-specific approach, empirically investigating the effects of male and female education, as measured by primary, secondary and tertiary enrolment ratios, on economic growth. Due to the renewed efforts made by the Asian economies to increase enrolment ratios and allocate resources efficiently in an effort to achieve the MDG of education for all, the present study focuses on Asia. The main differences between this study and a number of previous studies in the literature are as follows. We extend an endogenous growth framework based on congestion effects to accommodate gender-specific enrolment ratios and use an augmented version of the Solow (1956) model to estimate the impact of male and female enrolment at primary, secondary and tertiary educational levels on economic growth. Second, we use the extreme bounds analysis (EBA) of Leamer (1985) and its variants to identify and estimate the gender-disaggregated growth effects of male and female enrolment at different levels of education. The EBA is especially useful when there are several potential explanatory variables and it is necessary to select a few robust explanatory variables. Additionally, estimates based on the EBA reduce model uncertainty and are claimed to be robust (Leamer, 1985).

There are very few studies which examine the effects of education on growth at a gender disaggregated level; see Schultz (1993), Knowles, Lorgelly, and Dorian (2002), Klasen (2002), and Dollar and Gatti (1999). In particular, educating girls increases a country's stock of human capital and growth (Dollar and Gatti, 1999, Klasen, 2002, Knowles et al., 2002, Schultz, 1993). Educating females, just as with males, directly increases the stock of human capital and income, and promotes growth. However, there is a further benefit in educating girls because of the positive influence of mothers on the education and health of their children (Schultz, 2002). Therefore, the emphasis of this paper is on examining the gender-disaggregated effects of education on growth.

The structure of this paper is as follows. Section 2 reviews the literature on education and economic growth; Section 3 discusses the methodology; Section 4 presents the empirical results; and Section 5 concludes.