Educational Thresholds and Economic Growth: Empirical Evidence from Brazilian States

This paper examines the convergence process in Brazil over the period of 1985-2004, giving a special attention to the role of human capital as a conditioning factor to convergence. It examines how different levels of human capital influence growth in different regions of Brazil. Different measures of human capital are used in the growth regressions and the results show that they play a significant role in explaining the growth process. The evidence indicates that different levels of human capital have different impacts on the per capita income growth, depending on the level of development of the states. Lower levels of human capital explain better the convergence among the less developed states and higher levels of human capital are more adequate among the more developed states. The impact of the relative intermediate levels of human capital on growth is stronger in all samples, suggesting the existence of threshold effect in education.