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53
Table I - OLS Estimates For the Base Specification – 1970-89 Period
OLS
OLS
OLS
OLS
(1970-89 means) (1970-89 means) (1970-89 means) (1970-89 means)
Human Capital Equation
Log(h70)
Log(income70)
0.354
(5.69)
0.350
(7.49)
-0.049
(-1.52)
-
Log(k70)
-0.002
(-0.06)
0.166
(2.63)
0.002
(0.13)
0.277
(3.99)
1.770
(5.42)
0.94
56
Log(sk)
Log(n)
Log(enrollment rate)
Intercept
R-squared
N of obs
0.354
(5.69)
0.350
(7.49)
-0.049
(-1.52)
-
-
-0.002
(-0.06)
0.166
(2.63)
0.002
(0.13)
0.277
(3.99)
1.770
(5.42)
0.94
56
0.132
(2.84)
0.009
(0.52)
0.419
(4.65)
2.215
(7.50)
0.95
90
0.132
(2.84)
0.009
(0.52)
0.419
(4.65)
2.215
(7.50)
0.95
90
Enrollment Equation
Avg Democracy
Democracy 1970-74
Democracy*s2
Democracy*n
Intercept
R-squared
N of obs
1.523
(6.04)
-
1.523
(6.04)
-
8.480
(3.50)
-22.097
(-3.27)
-1.955
(-11.57)
0.51
109
8.480
(3.50)
-22.097
(-3.27)
-1.955
(-11.57)
0.51
109
-
1.228
(5.38)
10.486
(4.40)
-28.087
(-4.21)
-1.755
(-11.54)
0.45
109
1.228
(5.38)
10.486
(4.40)
-28.087
(-4.21)
-1.755
(-11.54)
0.45
109
Analysis of Effects*
Effect of democracy
1.221
1.221
0.834
0.834
on Log(sh)
Wald Statistic
19.55
19.55
11.26
11.26
(p-value)
(0.00)
(0.00)
(0.001)
(0.001)
Effect of democracy
0.338
0.511
0.231
0.349
on human capital
(t-statistics based on heteroskedastic-consistent (White Robust) standard errors, in parenthesis)
* Effects are computed at the sample means of s2 and n.
Interaction terms in each equation are constructed using the appropriate definition of democracy (period
average or initial value where applicable).
21
Table II – Simultaneous Estimation of the Human Capital and Enrollment Equations
1970-89 Period
SUR
(1970-89 means)
MLE
(1970-89 means)
SUR
(1970-89 means)
MLE
(1970-89 means)
0.350
(13.32)
-0.046
(-1.43)
0.132
(3.74)
0.006
(0.28)
0.407
(9.82)
2.171
(8.33)
0.95
90
0.352
(13.43)
-0.035
(-1.09)
0.136
(3.85)
-0.006
(-0.26)
0.362
(8.76)
1.999
(7.68)
0.95
90
Human Capital Equation
Log(h70)
0.350
(13.33)
-0.044
(-1.38)
0.134
(3.78)
0.005
(0.23)
0.402
(9.70)
2.150
(8.26)
0.95
90
Log(income70)
Log(sk)
Log(n)
Log(enrollment rate)
Intercept
R-squared
N of obs
0.352
(13.47)
-0.030
(-0.93)
0.141
(3.99)
-0.009
(-0.43)
0.346
(8.40)
1.935
(7.45)
0.95
90
Enrollment Equation
Avg Democracy
Democracy 1970-74
Democracy*s2
Democracy*n
Intercept
R-squared
N of obs.
1.174
(3.71)
1.125
(3.64)
-
8.719
(2.33)
-23.879
(-2.69)
-1.644
(-13.07)
0.51
90
9.216
(2.53)
-24.170
(-2.76)
-1.627
(-13.17)
0.51
90
-
1.023
(3.18)
9.197
(2.30)
-27.378
(-2.85)
-1.500
(-13.57)
0.46
90
0.990
(3.12)
9.564
(2.43)
-27.216
(-2.86)
-1.494
(-13.65)
0.47
90
Analysis of Effects*
0.832
0.793
0.604
0.588
Effect of democracy
on Log(sh)
Wald Statistic
11.59
11.07
6.92
6.80
(p-value)
(0.001)
(0.001)
(0.008)
(0.009)
Effect of democracy
0.335
0.274
0.246
0.213
on human capital
Wald Statistic
10.32
9.59
6.47
6.29
(p-value)
(0.001)
(0.002)
(0.011)
(0.012)
(t-statistics in parenthesis)
*Effects are computed at the sample means of s2 and n.
Interaction terms in each equation are constructed using the appropriate definition of democracy (period
average or initial value where applicable).
22
Table III - Estimates for the 1960-89 Period
OLS
(1960-89 means)
SUR
(1960-89 means)
OLS
(1960-89 means)
SUR
(1960-89 means)
Human Capital Equation
Log(h60)
0.274
(7.89)
-0.044
(-1.28)
0.090
(1.47)
0.067
(2.42)
0.503
(5.11)
2.621
(7.82)
0.93
84
Log(income60)
Log(sk)
Log(n)
Log(enrollment rate)
Intercept
R-squared
N of obs
0.260
(9.22)
0.004
(0.10)
0.003
(0.06)
0.084
(2.99)
0.560
(11.45)
2.229
(7.36)
0.94
68
0.274
(7.89)
-0.044
(-1.28)
0.090
(1.47)
0.067
(2.42)
0.503
(5.11)
2.621
(7.82)
0.93
84
0.258
(9.09)
-0.001
(-0.02)
0.002
(0.04)
0.088
(3.12)
0.575
(11.72)
2.292
(7.53)
0.94
68
Enrollment Equation
Avg Democracy
Democracy 1960
Democracy*s2
Democracy*n
Intercept
R-squared
N of obs
1.715
(4.45)
1.189
(3.28)
-
7.948
(2.92)
-8.188
(-1.49)
-2.359
(-9.04)
0.58
82
8.207
(2.30)
-15.699
(-2.16)
-1.807
(-11.12)
0.59
68
-
0.788
(1.78)
14.932
(4.34)
-18.879
(-2.85)
-1.907
(-5.98)
0.51
82
0.717
(2.07)
10.725
(3.40)
-23.039
(-3.58)
-1.494
(-8.13)
0.58
68
Analysis of Effects*
Effect of democracy
1.692
0.918
0.626
0.276
on Log(sh)
Wald Statistic
17.83
10.24
2.07
1.03
(p-value)
(0.000)
(0.001)
(0.155)
(0.310)
Effect of democracy
0.851
0.514
0.315
0.159
on human capital
Wald Statistic
9.49
1.02
(p-value)
(0.002)
(0.312)
(t-statistics in parenthesis – OLS t-stats are White-Robust)
*Effects are computed at the sample means of s2 and n. Effects are unchanged when the SUR estimator is
replaced with an MLE estimator – results available upon request.
Interaction terms in each equation are constructed using the appropriate definition of democracy (period
average or initial value where applicable).
23
Table IV – Random Effects Estimates (Two-subperiod averages)
SUR
(1970-89 period)
MLE
(1970-89 period)
SUR
(1960-89 period)
MLE
(1960-89 period)
Human Capital Equation
Log(h)
Log(income)
Log(sk)
Log(n)
Log(enrollment rate)
R-squared
N of obs
0.646
(26.27)
-0.011
(-0.54)
0.093
(4.56)
0.003
(0.25)
0.171
(6.39)
0.95 0.97
85
0.653
(27.43)
0.000
(-0.02)
0.106
(5.31)
-0.007
(-0.57)
0.073
(2.83)
0.95 0.96
85
0.524
(16.75)
0.007
(0.29)
-0.008
(-0.25)
0.031
(2.15)
0.318
(10.10)
0.94 0.95
66
0.521
(16.60)
0.010
(0.41)
0.005
(0.15)
0.026
(1.82)
0.252
(7.97)
0.93 0.94
66
0.480
(2.37)
10.940
(4.95)
-12.782
(-2.08)
0.51 0.52
66
0.256
(1.63)
9.104
(4.75)
-7.169
(-1.39)
0.44 0.46
66
Enrollment Equation
Democracy
Democracy*s2
Democracy*n
R-squared
N of obs
0.692
(3.67)
9.458
(4.28)
-14.420
(-2.37)
0.46 0.50
85
0.541
(3.30)
8.354
(4.41)
-10.215
(-1.90)
0.43 0.46
85
Analysis of Effects*
0.630
0.554
0.397
0.305
Effect of democracy
on Log(sh)
Wald Statistic
16.53
17.77
3.52
3.18
(p-value)
(0.000)
(0.000)
(0.061)
(0.075)
Effect of democracy
0.108
0.041
0.126
0.077
on human capital
Wald Statistic
12.10
5.74
3.42
3.07
(p-value)
(0.000)
(0.017)
(0.064)
(0.080)
(t-statistics in parenthesis)
(All regressions include period-specific effects – constant term estimates omitted)
*Effects are computed at the sample means of s2 and n.
Interaction terms in each equation are constructed using the appropriate definition of democracy (period
average or initial value where applicable).
Periods are defined as follows:
1960-74 and 1975-89 for the 1960-89 period
1970-79 and 1980-89 for the 1970-89 period.
24
Table V – SUR Estimates for Alternative measures of human capital (1970-89 period)
Measure of sh:
Years of Primary
Schooling
Years of Secondary
Schooling
Years of Higher
Schooling
Human Capital Equation
Log(h70)
Log(income70)
Log(sk)
Log(n)
Log(enrollment rate)
Intercept
R-squared
N of obs
0.359
(11.53)
0.013
(0.39)
0.162
(4.04)
-0.055
(-2.18)
0.591
(6.31)
0.925
(3.70)
0.92
90
0.374
(10.64)
-0.040
(-0.79)
0.102
(1.81)
0.058
(1.72)
0.633
(8.94)
1.690
(4.01)
0.94
94
0.211
(5.25)
0.009
(0.15)
0.019
(0.34)
0.067
(1.83)
0.725
(16.68)
1.017
(2.17)
0.96
95
1.259
(3.84)
9.060
(2.33)
-24.195
(-2.66)
-1.732
(-13.90)
0.51
94
1.561
(2.80)
14.649
(2.23)
-4.311
(-0.27)
-3.964
(-18.49)
0.42
95
Enrollment Equation
Avg Democracy
Democracy*s2
Democracy*n
Intercept
R-squared
N of obs.
0.268
(1.83)
1.916
(1.12)
0.904
(0.22)
-0.370
(-6.37)
0.21
90
Analysis of Effects*
Effect of democracy
0.358
0.920
1.948
on Log(sh)
Wald Statistic
10.01
14.51
20.81
(p-value)
(0.002)
(0.000)
(0.000)
Effect of democracy
0.212
0.583
1.413
on human capital
Wald Statistic
8.00
12.28
19.35
(p-value)
(0.005)
(0.001)
(0.000)
(t-statistics in parenthesis)
*Effects are computed at the sample means of s2 and n.
Interaction terms in each equation are constructed using the appropriate definition of democracy (period
average or initial value where applicable).
25
Table VI – SUR Estimates for Alternative Measures of sh (1970-89 period)
Govt exp. on educ
(% GDP)
Teacher Pupil Ratio
(Primary educ)
Teacher Pupil Ratio
(Secondary educ)
Human Capital Equation
Log(h70)
Log(income70)
Log(sk)
Log(n)
Log(Measure of sh)
Intercept
R-squared
N of obs
0.416
(10.92)
0.123
(2.78)
0.242
(4.71)
-0.018
(-0.59)
-0.008
(-0.12)
0.473
(1.15)
0.88
84
0.423
(11.17)
0.109
(2.25)
0.308
(6.43)
-0.019
(-0.57)
0.032
(0.31)
0.597
(0.94)
0.90
85
0.426
(10.54)
0.141
(2.91)
0.279
(4.76)
-0.036
(-0.92)
0.229
(2.23)
-0.346
(-0.64)
0.89
66
-0.521
(-3.48)
-3.721
(-2.13)
11.707
(2.97)
3.690
(65.59)
0.52
85
-0.315
(-1.75)
-1.791
(-0.85)
3.199
(0.65)
3.191
(45.25)
0.21
66
Log sh Equation
Avg Democracy
Democracy*s2
Democracy*n
Intercept
R-squared
N of obs.
0.215
(0.98)
5.004
(2.00)
-2.952
(-0.49)
-3.476
(-36.44)
0.21
84
Analysis of Effects*
Effect of democracy
0.307
-0.335
-0.290
on Log sh
Wald Statistic
2.90
9.46
4.74
(p-value)
(0.089)
(0.0021)
(0.029)
Effect of democracy
-0.002
-0.011
-0.066
On human capital
Wald Statistic
0.01
0.10
2.44
(p-value)
(0.903)
(0.758)
(0.119)
(t-statistics in parenthesis)
*Effects are computed at the sample means of s2 and n.
Interaction terms in each equation are constructed using the appropriate definition of democracy (period
average or initial value where applicable).
26
Table VII - Values used to compute the effects at the means of s2 and n
Population growth 1970-89
Squared savings rate 1970-89
Population growth 1960-89
Squared savings rate 1960-89
Obs
129
125
127
120
Mean
.027
.034
.034
.032
Table VIII – Levels and Mean Changes of Various Measures of Human Capital
Variable
% change in total Human Capital 1970-90
% change in primary schooling 1970-90
% change in secondary schooling 1970-90
% change in higher schooling 1970-90
% change in total Human Capital 1960-90
% change in primary schooling 1960-90
% change in secondary schooling 1960-90
% change in higher schooling 1960-90
Total Human Capital 1960
Total Human Capital 1970
Total Human Capital 1990
# Obs
98
98
103
103
96
96
103
98
101
102
105
27
Mean Std. Dev.
0.483
0.457
0.371
0.475
0.844
0.555
1.117
0.651
0.664
0.547
0.507
0.573
1.173
0.693
1.471
0.874
3.335
2.418
3.815
2.635
5.102
2.853
Min
-0.102
-0.125
-0.222
-0.811
-0.438
-0.518
-0.325
-1.179
0.072
0.040
0.546
Max
3.230
3.312
2.950
3.164
2.686
2.849
2.926
3.164
9.612
10.143
12.000