Why Do Some Countries Produce so Much More Output Per Worker than Others?
Stanford University Working Paper No. 98-007
50 Pages Posted: 16 Dec 1996
There are 3 versions of this paper
Why Do Some Countries Produce so Much More Output Per Worker than Others?
Why Do Some Countries Produce so Much More Output Per Worker than Others?
Date Written: March 11, 1998
Abstract
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.
JEL Classification: E23, O47
Suggested Citation: Suggested Citation
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