Economics & Finance / Economic Theory / Development Economics

Why More Schooling Won't Close the Wealth Gap (A Non-Parametric Upper Bound Analysis)

Francesco Caselli, Antonio Ciccone

Conventional wisdom says more education leads to higher GDP. But what if even the most optimistic scenario shows that improving schooling in developing countries can only explain a fraction of their income gap with rich nations? This video breaks down a groundbreaking study by Francesco Caselli and Antonio Ciccone that uses a non-parametric upper bound approach to challenge the assumptions of traditional development accounting. We explore why simply adding years of schooling—even to U.S. levels—falls short, and what this means for policy, technology, and the real drivers of prosperity. If you've ever wondered why some countries stay poor despite educational gains, this analysis will change how you think about development.