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UNU-WIDER Globalization, Literacy Levels, and Economic Development

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A teenager wears torn rubber boots in a muddy local market in Bac Ha, Viet Nam. As of 2005 figures, half the world population—more than 3 billion people–is estimated to live on less than USD 2.50 a day. Bac Ha, Viet Nam. UN Photo/Kibae Park.

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Globalization, Literacy Levels, and Economic Development

This paper estimated models for GDP growth rates, poverty levels, and inequality measures for the period 1990–2000 using data on 54 developing countries at five-yearly intervals. Issues of globalization were investigated by analysing the differential effects of the countries’ exports and imports and by postulating trans-logarithmic models that allow for non-linear effects of literacy levels and measures of openness. The main findings were that literacy rates affected growth rates in a quadratic manner and countries with higher literacy were more likely to benefit from globalization. Second, the model for growth rates showed non-linear and differential effects of the export/GDP and import/GDP ratios. Third, the models indicated that population health indicators such as life expectancy were important predictors of GDP growth rates. Fourth, models for poverty measures showed that poverty was not directly affected by globalization indicators. Finally, the model for Gini coefficients indicated significant effects of ‘medium’ and ‘high’ skilled labour work force, with higher proportions of high-skilled labour implying greater inequality.
Publisher:
UNU-WIDER
Series:
WIDER Research Paper
Volume:
2008/04
Title:
Globalization, Literacy Levels, and Economic Development
Authors:
Alok Bhargava
Publication date:
January 2008
ISSN Web:
1810-2611
ISBN 13 Web:
9789292300449
Copyright holder:
© UNU-WIDER
Copyright year:
2008
Keywords:
globalization, economic development, education, endogeneity, inequality, poverty, non-linearities, trade
JEL:
C33, C5, I3, O11, O5
Project:
Impact of Globalization on the World's Poor
Sponsor:
The governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida) and the United Kingdom (Department for International Development).
Format:
online

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