Globalization, Literacy Levels and Economic Development

This paper estimated models for GDP growth rates, poverty levels and inequality measures for the period 1990-2000 using data on 54 developing countries at 5-yearly intervals. Issues of globalization were investigated by analyzing the differential effects of exports and imports of countries and by postulating trans-logarithmic models that allow for non-linear effects of literacy levels and measures of openness. The main findings were that literacy rates affected growth rates in a quadratic manner, and countries with higher literacy were more likely to benefit from globalization. Second, the results for growth rates showed non-linear and differential effects of export/GDP and import/GDP ratios. Third, the models indicated that population health indicators such as life expectancy were important predictors of GDP growth rates. Fourth, results for poverty measures showed that poverty was not directly affected by globalization indicators. Finally, the model for Gini coefficients indicated significant effects of “medium” and “high” skilled labor work force, with higher proportions of high-skilled labor implying greater inequality