Skilled labor productivity and cross-country income differences

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Author: Hendricks, Lutz; Schoellman, Todd


This paper extends development accounting to an environment that features imperfectly substitutable skills and cross-country variation in skilled labor productivity. We find that human capital accounts for between one-half and three-fourths of cross-country income gaps. This finding remains robust when we consider alternative shifters of skilled labor productivity, alternative definitions of skilled and unskilled labor, and alternative values for the elasticity of substitution between skilled and unskilled labor. We derive closed form solutions for the contribution of human capital to...  [+] Show more

Subjects: Labour market; Skills and knowledge; Performance; Employment

Keywords: Comparative analysis; Productivity; Wage differential; Skilled worker; Unskilled worker; Labour supply; Human capital

Published: Chapel Hill, North Carolina: [Department of Economics, University of North Carolina?], 2019

Physical description: 48 p.

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Resource type: Paper

Call number: TD/TNC 138.921

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