The use of formal education in Denmark 1980-1992

16

in which L ^X andL ^M express pure labour content in exports and imports of commodities
respectively. L is labour endowment in Denmark andL_w is the wolds labour endowment. The E
‘s similar stands for education.

A country (Denmark) is abundant in education compared to labour if its share of worlds
education endowment is larger than it share of worlds labour endowment (left inequality) or
expressed in another way: if the average worker in Denmark has more education than in the
world as a whole (right inequality):

E^E

Ew
] —>-

LL
w

Homogeneous preferences mean the same consumption patterns across countries (the number
of TV-sets and the amount of furniture per capita are the same in countries on the same income
level). The factor content in a countries consumption (absorption) are therefore equal to the
factor content in its share of worlds consumption: L^C ' sL and E ^C ' sE in which top
ww

symbol C denotes labour and education contents in consumption. Top symbol Y denotes
content in domestic production, and with equilibrium in factor markets we have
L 'L^Y 'L^C%(L^X&L^M) andE ' E^Y ' E^C%(E^X&E^M) . Combining and inserting:
Denmark is well endowed with education in relation to labour if and only if (Leamer 1980,
1984):

E > L ] E > EC
E^c L^c ~ L L^c

where the second inequality says that education per worker is larger in production than in
absorption. Many types of education E¹ , E²... E ⁿ can be ordered after Denmarks relative
endowment with different types of education so that:

which will be revealed in the relationship between production and absorption:

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