Does Education Promote Stable Property Rights?

21 October 2013
Publication Type: Working Paper
JEL Code: O10, P16

This paper sets out to establish an empirical link between education and property rights. The analysis is based on a new index of property rights derived from a set of commonly used indicators. As expected, education has a generally positive impact on property rights. But the relationship is not linear. The effect also depends on level of income. More education might not always be good for property rights in lowincome countries. Instrumental variable estimation demonstrates that the schooling of the least educated 60 percent population is better identified to measure the impact of human capital on property rights than mean years of schooling. The dynamic panel estimation of the relationship reveals that it takes some time before an increase in the human capital of the least educated 60 percent population bears a positive impact on property right institutions. The independent influence of education on property rights is found to be stronger than that of income in most specifications.

Working paper 380
1 October 2013