Barro and Lee (2001) series for the extended 1960–1990 period. Income is GDP
per worker from the PWT mark 5.6 and the physical capital data is from Easterly and
Levine (2001). To facilitate comparison with Table 7 we use the same numbering for
the different regressions so that each column corresponds to the same regression in
both tables. Some caution is needed in the comparison of both tables. The GDP and
capital data are different and data availability implies that the number of observations
in Table 8 is 59. With these caveats in mind Table 8 shows that the new BL data
qualitatively provides the same results as before: the change in the schooling variable
is not significantly associated with income growth. In most of the new regressions the
schooling variable appears with a positive coefficient, except for the regression with
Pritchett’s definition of human capital that includes initial income (regression 3). But
BL’s new series fail to show significance in each of the specifications tested. Note however
than in Krueger and Lindahl’s equation (regression 4), the schooling variable is
only marginally non-significant.
Next, we test the performance of our new data set in the same regressions and sample
of countries as in Table 8. The results are reported in Table 9, regressions (1) to (5).
The schooling variable is not significant in regressions (1) to (3), that is, in regressions
run with Benhabib and Spiegel (1994) and Pritchett (2001) specifications for human
capital. However, in regressions based on the Mincerian definition (regression 4) our
schooling variable is highly significant. Moreover, the point estimate (9.6%) is fairly
in line with the average findings of labour studies reported by Psacharopoulos (1994)
and Psacharopoulos and Patrinos (2002). The additional introduction of the initial
level of physical capital causes the significance of the schooling variables to fall, but
the change in schooling is still significant at a 6% level.
The number of countries in regressions (1)–(5) is lower than the one reported in the
previous papers. This is because we are analysing the growth rate over the 1960–1990
period, as opposed to the 1965–1985 interval. Since several countries do not have