Why Do Some Countries Produce so Much More Output Per Worker than Others?
Robert E. Hall
Stanford University - The Hoover Institution on War, Revolution and Peace; National Bureau of Economic Research (NBER)
Charles I. Jones
Stanford Graduate School of Business; National Bureau of Economic Research (NBER)
NBER Working Paper No. w6564
Output per worker varies enormously across countries. Why? On an accounting basis, our analysis shows that differences in physical capital and educational attainment can only partially explain the variation in output per worker we find a large amount of variation in the level of the Solow residual across countries. At a deeper level, we document that the differences in capital accumulation, productivity, and therefore output per worker are driven by differences in institutions and government policies, which we call social infrastructure. We treat social infrastructure as endogenous, determined historically by location and other factors captured in part by language.
Number of Pages in PDF File: 51working papers series
Date posted: June 10, 2000
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