Magali Jaoul

Higher education, causality and growth: a comparison of France and Germany before the Second World War

Economists were long unaware of the influence of knowledge upon the growth process. With theories of human capital and theories of endogenous growth, knowledge gained a central position in the growth process. However, this has not been proved in many industrialized countries. The nature of the relations between education and growth is hence far from having been perfectly determined. It is therefore of interest to examine the links between education and economic growth. From this point of view, three questions are addressed. Does higher education play a part in the growth process? Which sector of education is involved? Is its role the same in different countries? Using the notion of causality developed by Granger, the relationship between higher education and economic growth is compared in France and Germany before the Second World War. The results show that higher education has an influence on gross domestic product but only in the case of France. Germany does not seem to obey the dominant theory whereby education is the cause of growth. Moreover, economic growth increases the number of students in Germany. This is consistent with the idea that education is a growth‐driven accompanying investment.Economists were long unaware of the influence of knowledge upon the growth process. With theories of human capital and theories of endogenous growth, knowledge gained a central position in the growth process. However, this has not been proved in many industrialized countries. The nature of the relations between education and growth is hence far from having been perfectly determined. It is therefore of interest to examine the links between education and economic growth. From this point of view, three questions are addressed. Does higher education play a part in the growth process? Which sector of education is involved? Is its role the same in different countries? Using the notion of causality developed by Granger, the relationship between higher education and economic growth is compared in France and Germany before the Second World War. The results show that higher education has an influence on gross domestic product but only in the case of France. Germany does not seem to obey the dominant theory whereby ...