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Income convergence prospects in Europe: Assessing the role of human capital dynamics

Crespo Cuaresma, Jesus and Havettová, Miroslava and Lábaj, Martin (2012) Income convergence prospects in Europe: Assessing the role of human capital dynamics. Department of Economics Working Paper Series, 143. WU Vienna University of Economics and Business, Vienna.

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Abstract

We employ income projection models based on human capital dynamics in order to assess quantitatively the role that educational improvements are expected to play as a driver of future income convergence in Europe. We concentrate on income convergence dynamics between emerging economies in Central and Eastern Europe and Western European countries during the next 50 years. Our results indicate that improvements in human capital contribute significantly to the income convergence potential of European emerging economies. Using realistic scenarios, we quantify the effect that future human capital investments paths are expected to have in terms of speeding up the income convergence process in the region. The income projection exercise shows that the returns to investing in education in terms of income convergence in Europe could be sizeable, although it may take relatively long for the poorer economies of the region to rip the growth benefits. (authors' abstract)

Item Type: Paper
Keywords: economic growth / income convergence / human capital / income projections / Europe / emerging economies / Europa / Wirtschaftswachstum / Einkommensentwicklung / Ausbildung
Classification Codes: RVK QC 200 ; JEL O47, O52, I25, P27
Divisions: Departments > Volkswirtschaft
Depositing User: Claudia Tering
Date Deposited: 16 Jul 2012 08:56
Last Modified: 22 Apr 2014 12:25
URI: http://epub.wu.ac.at/id/eprint/3597

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