American Economic Review Vol. 104 No. 9 2014

Human Capital and the Wealth of Nations

Rodolfo E. Manuelli¹; Ananth Seshadri²

¹ Department of Economics, Washington University in St. Louis, One Brookings Drive, St. Louis, MO 63130, and Federal Reserve Bank of St. Louis (e-mail: ) · ² Department of Economics, University of Wisconsin-Madison, 1180 Observatory Drive, Madison, WI 53706 (e-mail: )

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.

DOI

10.1257/aer.104.9.2736

Volume

104

Issue

9

Pages

2736-2762

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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