Education and poverty in a Solow growth model

In this paper, we study the eect of education on economic growth. In particular, we show how education may generate nonlinearities in the process of economic growth. In our model, the assumption of a non constant human capital obsolescence rate causes non constant returns to education in the production of human capital. This will allow us to identify the conditions under which a poverty trap may arise in a Solow growth model. As we will see, a sucient investment in education may help poor countries to escape from this trap. Subsequently, we will conduct some econometric analyses to prove that, at the aggregate level, our theoretical conclusions are conrmed by evidence