ABSTRACT
Human capital is an important asset: it confers benefits on individuals and is widely thought to provide an external benefit to society. Our purpose in this chapter is to contribute to the debate about the importance of human capital in growth by looking for a threshold effect that discontinuously raises the return to years of schooling. We are not directly concerned with adjustment following the recent global crisis. Rather, we focus on the determinants of output in long-run growth. That is not to say, however, that the crisis, or its resolution, does not have a major impact on the growth process.
