We measure college graduate quality—the average human capital of a college’s graduates—for graduates from 2,800 colleges in 48 countries. Graduates of colleges in the richest countries have 50% more human capital than graduates of colleges in the poorest countries. Migration reinforces these differences: emigrants from poorer countries are highly positively selected on human capital. Finally, we show that these stocks and flows matter for growth and development by showing that college graduate quality predicts the share of a college’s students who become inventors, engage in entrepreneurship, and become top executives both within and across countries.

For a search-theoretic model of the labor market, we seek conditions for the existence of a balanced growth path (BGP), where unemployment, vacancy, and worker’s transitions rates remain constant in the face of improvements in the production and search technologies. A BGP exists iff firm-worker matches are inspection goods and the quality of a match is drawn from a Pareto distribution. Declining search frictions contribute to growth with an intensity determined by the tail coefficient of the Pareto distribution. We develop a strategy to measure the rate of decline of search frictions and their contribution to growth.