The Effects of Schooling Level on Economic Convergence in Emerging Countries: Evidence from Romania

Increasing economic inequalities between Romanian counties triggered a wealth of research on this topic, including many theoretical and empirical studies focused on assessing the divergence process. While previous studies addressing the regional economic convergence/divergence in Romania applied various methods of investigation, some even acknowledging the spatial dependence and employing specific spatial econometric models, our study aims to advance the empirical analysis by using a more powerful investigation tool, namely the dynamic spatial panel model, important for capturing the spatial spillover effects. Drawing on data from 2000–2020, issued by the Romanian National Institute of Statistics (NIS), our study finds that tertiary education has a convergence accelerating effect on GDP per capita, while secondary education seems to be statistically insignificant in most models. Far from implying that secondary education is not important, this result simply reflects the fact that its territorial distribution is rather uniform relative to the population, therefore it does not bring evident comparative advantages. Our study highlights the importance of highly educated (hence more efficient and productive) workforce in reducing economic growth disparities. Nevertheless, we argue that investing only in education and not creating complementary job opportunities may lead to internal and external migration. Our results provide valuable insights for Romania’s territorial policy on education.