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Duke Economics Working Paper #95-56

Education in Production:
Measuring Labor Quality and Management


Dennis Tao Yang

Abstract

Production function studies have used the education of the head of the household or the average education of farm workers to assess the contribution of schooling to farm efficiency. This paper critically examines the information content of these measures by developing a team production model which suggests separate education measures to approximate labor quality and managerial skills. Empirical analyses based on Chinese farm household data show that the new measures are statistically superior to the existing alternatives. There is contributes theralized decision making on the farms where the highest schooling--More--(58%) most to production efficiency.

JEL: O15, J43

Published in American Journal of Agricultural Economics, Vol. 79, No. 3, August 1997, pp. 764-772.