J.Hall and R.Jones (1999) have calculated from international
data that on average that the returns on education are 13.4% per year for first
four years of schooling (grades 1–4), 10.1% per year for the next four years
(grades 5–8) and 6.8% for each year beyond eight years.
Thus someone with 12 years of schooling can be expected to
earn, on average, 1.1344 × 1.1014 × 1.0684 = 3.161 times as much as someone
with no schooling at all.
Economy-wide, the effect of human capital on incomes has
been estimated to be rather significant: 65% of wages paid in developed
countries is payments to human capital and only 35% to raw labor.
The higher productivity of well-educated workers is one of
the factors that explain higher GDPs and, therefore, higher incomes in
developed countries.
A strong correlation between GDP and education is clearly
visible among the countries of the world.
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