Education and endogenous growth in the neoclassical tradition

The aim of this paper is to analyse the evolution of the relationship between education spending and economic growth within the neoclassical framework. In this regard we may distinguish two phases: the one that developed during the 1960s, and the current phase, which has arisen from the theory of endogenous growth. As will be seen, the novelty of the ideas advanced by endogenous growth theory (EGT) is considerably reduced when the first generation of growth models is considered. On the other hand, the fundamental difference between them consists in the fact that the recent literature considers education to be a peculiar form of human capital, namely a production factor which, like the other traditional factors, labour and capital, can be accumulated. This assumption has generated a large body of literature showing the complexity of the relationship between economic growth and the accumulation of knowledge through education