American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Human Capital and the Wealth of Nations
American Economic Review
vol. 104,
no. 9, September 2014
(pp. 2736–62)
Abstract
We reevaluate the role of human capital in determining the wealth of nations. We use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries. Our model can explain differences in schooling and earnings profiles and consequently estimates of Mincerian rates of return across countries. We find that effective human capital per worker varies substantially across countries. Cross-country differences in Total Factor Productivity (TFP) are significantly smaller than found in previous studies. Our model implies that output per worker is highly responsive to changes in TFP and demographic variables.Citation
Manuelli, Rodolfo E., and Ananth Seshadri. 2014. "Human Capital and the Wealth of Nations." American Economic Review, 104 (9): 2736–62. DOI: 10.1257/aer.104.9.2736Additional Materials
JEL Classification
- E23 Macroeconomics: Production
- I25 Education and Economic Development
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- O47 Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence