Human capital accumulation and long‐term income growth projections for European regions |
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| Authors: | Jesús Crespo Cuaresma Gernot Doppelhofer Florian Huber Philipp Piribauer |
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| Affiliation: | 1. Vienna University of Economics and Business (WU), Austria;2. Wittgenstein Centre for Demography and Human Capital (WIC), Austria;3. International Institute for Applied Systems Analysis (IIASA), Austria;4. Austrian Institute of Economic Research (WIFO), Austria;5. Norwegian School of Economics (NHH), Norway |
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| Abstract: | We propose an econometric framework to construct projections for per capita income growth and human capital for European regions. Using Bayesian methods, our approach accounts for model uncertainty in terms of the choice of explanatory variables, the nature of spatial spillovers, as well as the potential endogeneity between output growth and human capital accumulation. This method allows us to assess the potential contribution of future educational attainment to economic growth and income convergence among European regions over the next decades. Our findings suggest that income convergence dynamics and human capital act as important drivers of income growth for the decades to come. |
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| Keywords: | European regions income projections model uncertainty spatial Durbin model |
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