Date of Award
Croft Institute for International Studies
Understanding a country's human capital externalities is an important part of understanding economic phenomena and implementing national economic policy. However, externalities are difficult to estimate. Measurement error can cause a misinterpretation of economic models and result in misguided policies. The two methods of calculating human capital externalities are the Mincer Equation and Constant-Composition approach. The author estimates human capital externalities in Mexico with the Constant-Composition approach because the Mincer approach often finds externalities where none are present. Using the Constant-Composition method, the author finds no indication of human capital externalities in Mexico.
Dawson, Lorin D., "Human Capital in Mexico: Estimating Externalities with the Constant-Composition Approach" (2015). Honors Theses. 592.