Assessing the Properties of the Human Capital Production Function: A Dynamic Approach

Abstract

This paper explores the generation process of human capital in a dynamic perspective. In order to do so: a) characterizes the recent evolution of human capital, using as proxy the same results panel of participating countries in PISA; b) explores different specifications of the production function of human capital capable of generating dynamic patterns observed; and c) shows the ability of different specifications econometric literature usually employed to correctly detect the structure of the production function. The observed dynamics are different between countries, highlighting the relative stability in the results of most developed countries, evolution consistent with certain specific properties of the production function. Additionally, the paper identifies the problems in econometric specifications usually employed in the literature to estimate correctly the importance of dynamic factors in the generation process of human capital.