How Important is Human Capital for Development? Evidence from Immigrant Earnings

Arizona State University, Economics Working Paper No. 98/4

42 Pages Posted: 3 Feb 1999

See all articles by Lutz Hendricks

Lutz Hendricks

UNC Chapel Hill; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 1998

Abstract

Following Mankiw, Romer, and Weil (1992) a growing number of studies find that neoclassical growth models, augmented by human capital, successfully account for the large cross-country income differences found in the data. This paper argues that such models are inconsistent with observations on immigrant earnings. Their central prediction, that migration from poor to rich countries generates only small earnings gains, is strongly violated in the data. A standard growth model with country-specific technologies, in contrast, accounts well for immigrant earnings across countries and over time.

JEL Classification: O15, O41, F22

Suggested Citation

Hendricks, Lutz, How Important is Human Capital for Development? Evidence from Immigrant Earnings (December 1998). Arizona State University, Economics Working Paper No. 98/4, Available at SSRN: https://ssrn.com/abstract=144410 or http://dx.doi.org/10.2139/ssrn.144410

Lutz Hendricks (Contact Author)

UNC Chapel Hill ( email )

Chapel Hill, NC 27599
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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