Could Education Increase the Economic Growth of Mexico?

Abstract

BSTRACT This paper studies the role of education on the economic growth of Mexico. The Uzawa-Lucas Model is used to study the contribution of human capital on growth, while the specific role of education is accounted with a Vector Error Correction (VEC) Model. The main finding of this paper is that an increase of one percent in human capital implies an increase of 1.59 percent on Mexican Gross Domestic Product (GDP). And given the role of education on human capital, an increase of one percent in years of schooling causes an increase in the long run GDP growth rate of 2.19