The workforce participation by women is higher in industrialized countries than ME countries. The years of compulsory schooling are lower in ME countries and the illiteracy rates are generally higher. The GDP is generally lower in ME countries than industrialized countries, as is the GDP per capita. Most of the ME countries are predominantly Muslim, where the industrialized countries are predominantly Christian. The birth rates are generally higher in the ME countries and there is a higher ratio of men to women.
Human Capital and the Middle East
1.a.
The co-efficient is 0.092.
1.b.
The regression coefficient is 0.04.
2. The estimated rate of return would be calculated using:
0.092x + e3.309 where x is the number of years schooling.
So the estimated return of 1 year of schooling would be $27.4.
As the regressions obtained are quite similar between the ME countries and industrialized countries it would be suggested that the differences in the amount of time spent at school would make a difference to GDP per capita in the ME countries.
These estimates are similar to the ones which I obtained. I estimated that returns would be approximately 9.2 percentage points for all the countries studied, and approximately 4 percentage points in ME countries.
The projections are given in the table. Data was not available for all countries so there are blank spaces were the projection could not be calculated.
Country
Projected GDP per capita
Turkey
Syria
Lebanon
Israel
West Bank and Gaza
Iraq
Iran
Saudi Arabia
Egypt
Libya
Yemen
Oman
United Arab Emirates
Qatar
Bahrain
Kuwait
Other Countries
Argentina
Australia
Brazil
Germany
Italy
France
Mexico
Netherlands
Norway
Russia
Spain
South Korea
UK
USA
Country
GDP per capita
Projected GDP per capita
Turkey
Syria
Lebanon
Israel
West Bank and Gaza
Iraq
Iran
cannot be attributed to schooling
Based on these calculations the difference between Qatar's GDP and that of the U.S. could be attributed to differences in length of schooling.
The main reasons for lack of investment in human capital in ME countries may be the lack of stability in the country due to the differences in political regime and conflict.
We should not expect that they invest less in human capital, as this is a means by which the market perfection may be improved.
There are other factors which will impact upon both the between and within comparisons, such as religious issues and governmental policy issues.
a. The main findings in the figure indicate that during the eighties there was a wide difference between the economic returns from eleven years or less schooling and 16 years or more schooling in the West Bank and Gaza strip. However this changed during the late 1980s and early 1990s so that by 1992 there was less financial benefit to completing longer schooling. The optimal amount of schooling in 1992 was twelve years to achieve the highest per capita GDP.
b. The second figure could partially explain the findings as the increase in those with 16 years or more education may mean that more people are competing for higher paid jobs, which may result in higher unemployment in this group. The numbers of those with 12 years of schooling remained constant over the period which may explain the consistency in the previous chart.
14. There is strong evidence that this may be one of the factors involved but there may be other contributing factors, so it would not be appropriate to attribute the sharp decline solely to the increasing supply of educated workers without further evidence.
15. a. The number indicates the difference between those employed locally and those…
