DOI:

Abstract

This paper examines the effect of human capital accumulated from higher education on regional development in Vietnam. It also examines a possible two-way causality between these two variables. Two types of schools are compared and contrasted: vocational and university. Regional development is measured by industrial output per capita and industrialization level for each province. A combination of the System Generalized Method of Moments (SGMM) and Fixed Effect Three Stage Least Squares (FE3SLS) procedures is performed in order to control lagged dependent variables and improve the efficiency of the estimators. The results show that vocational education helps regional development in Vietnam more than university education. On the reverse causality, we find that the effect of regional development on university enrollments is higher than on vocational-school enrollments.

Keywords

Regional Development; Vocational Schools; Universities.