Author(s) |
Chambra Mundachalil, Jayadevan
Hoang, Nam
Yarram, Subba Reddy
|
Publication Date |
2022-10-11
|
Abstract |
Middle-income trap refers to the economic growth strategies that transition low-income countries
into middle-income ones but fail to transition the middle-income countries into high-income
countries. We observe the existence of a middle-income trap for upper-middle- and lower middle-income countries. We examine the reasons for the middle-income trap using the
Bayesian model averaging (BMA) and generalized method of moments (GMM). We also explore
the transformation of middle-income economies into high-income economies using logistic, probit
and Limited Information Maximum Likelihood (LIML) regression analyses. Random forest analysis is
also used to check the robustness of the findings. BMA analysis shows that education plays an
enabling role in high-income countries in determining economic growth, whereas the full poten tial of education is not fully utilized in middle-income countries. GMM estimations show that the
education coefficient is positive and significant for high-income and middle-income countries. This
implies that education plays a decisive positive role in achieving economic growth and gives a path
to escape from the middle-income trap. However, the education coefficient for middle-income
countries is approximately half that of high-income countries. Therefore, the findings of this study
call for additional investment and focused strategies relating to human capital endowments
|
Link | |
Publisher |
University of New England
|
Title |
Human capital and the middle-income trap revisited
|
Type of document |
Dataset
|
Entity Type |
Publication
|
Name | Size | format | Description | Link |
---|