Denison revisited: Education and economic growth once again

Positive effects of formal education on economic growth have been postulated by economists for over four hundred years. In 1962, Edward F. Denison provided persuasive empirical evidence to support the belief that education had significantly contributed to United States economic growth. Subsequent applications of the growth accounting methodology by Denison and others have yielded less conclusive education results. Despite these mixed results and use of a methodology that has proved to be controversial, Denison's education results are still frequently cited by economists and policymakers, and his methods are still employed to examine education's role in economic growth.;Given the indeterminateness of his results, and the weaknesses in his techniques, the reasons why Denison's work remains a formidable presence in this debate are not clear. Investigating these reasons requires asking questions about how economists reason and argue and about what constitutes valid and meaningful economic thought.;These questions suggest a new methodological approach for understanding the history of economic thought. This study develops an approach that draws on the ideas of Donald McCloskey and Leo Rogin.;McCloskey's insight that economists must be persuasive to be effective suggests a methodology for understanding Denison's work. Denison's persuasiveness can be understood by carefully analyzing citations of his work, which indicate the effect of Denison's work on economists and policymakers. Denison's influence on institutionalizing growth accounting is the ultimate measure of his persuasiveness. But recognizing the rhetorical effectiveness of Denison's work is not enough to understand why Denison's work took the shape it did.;Rogin recognized that historical conditions and policy needs shape economic theory as do the practical aims and normative perspectives of economists. His insights clarify the shape of Denison's work as well as the resulting critical debate about it.;Placing Denison's work in both historical and rhetorical contexts illustrates how Denison's work has contributed to the debate about the sources of economic growth. More important, the study of Denison's contribution to the sources-of-growth debate offers a paradigm of how economic thought develops by means of a conversation throughout history. It also indicates how the discipline of economics interacts with society.