Journal Article Role of Education in Production: A Slightly New Approach Get access Rati Ram Rati Ram Washington State University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 95, Issue 2, September 1980, Pages 365–373, https://doi.org/10.2307/1885505 Published: 01 September 1980

Fairly recent data for about one hundred countries indicate that as the average level of schooling increases, educational inequality first increases and, after reaching a peak, starts declining in later phases of educational expansion. The turning point occurs when average schooling is about seven years. The observed empirical generalization, which seems quite robust, appears to have important implications for educational and distributional policies and for research on the linkage between education and income inequality.

Rati Ram, Wagner's Hypothesis in Time-Series and Cross-Section Perspectives: Evidence from "Real" Data for 115 Countries, The Review of Economics and Statistics, Vol. 69, No. 2 (May, 1987), pp. 194-204

A critique of the analyses and conclusions reached by a study of the relationships between economic and demographic variables conducted by Hazledine and Moreland published in 1977 is presented. Inappropriate analyses of cross-sectional data from 82 countries resulted in parametric estimates that did not justify the conclusions reached by Hazledine and Moreland. Concerning diminished returns to scale suffered by less developed regions the author found on reexamination the scale estimates to differ only slightly across regions and also the parameter reflecting returns to scale with respect to labor and capital to produce erroneous estimates for developed countries. The reported significant positive relationship between infant mortality and birth rate is not justified for low income countries because the mortality variable had been dropped from 2 of the 3 fertility regressions for low income regions. The relationship specified therefore holds only for Asia. The large differences across regions in savings behavior is a questionable finding for several reasons including the inappropriate comparisons across regions of estimated coefficients drawn from differently specified equations. In addition various extrapolations and simulations were found to be useless because of instabilities in and poor predictive capability of the underlying estimates.

A study of the impact of government size on economic performance and growth is important. Theoretically, one point of view suggests that a larger government size is likely to be detrimental to efficiency and economic growth because, for example, (i) government operations are often conducted inefficiently, (ii) the regulatory process imposes excessive burdens and costs on the economic system, and (iii) many of government's fiscal and monetary policies tend to distort economic incentives and lower the productivity of the system. At the other extreme, one can identify some points of view that assign to the government a critical role in the process of economic development, and could argue that a larger government size is likely to be a more powerful engine of economic development. There are several arguments on which the latter point of view is based. These include, besides others, (i) role of the government in harmonizing conflicts between private and social interests, (ii) prevention of exploitation of the country by foreigners, and (iii) securing an increase in productive investment and providing a socially optimal direction for growth and development.

Comments on a study by Conger and Campbell which postulated a 6 equation dynamic model including a fertility equation, estimated by 2 stage least squares on the basis of aggregate data for the U.S. The authors present a table with 3 sets of estimates for each of the 6 structural equations specified in the earlier study; 2 stage least squares estimates obtained for 1946-70 and 1946-76 and the estimates obtained by Conger and Campbell are indicated. The authors report that they were unable to obtain the results reported by the latter; their estimates were quite different and did not seem to support the conclusions offered in the earlier study. Estimates for the longer period were substantially different from those for the shorter. The authors believe that the Conger Campbell data also do not support the Conger-Campbell conclusions. Each point is discussed, with reference to the table. The equations are used to evaluate fertility, female participation, infant mortality, income, education, and medical expenditure.

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