Experience Matters: Human Capital and Development Accounting

65 Pages Posted: 1 Feb 2013

See all articles by David Lagakos

David Lagakos

University of California, San Diego (UCSD) - Department of Economics; National Bureau of Economic Research (NBER)

Benjamin Moll

Princeton University - Department of Economics

Tommaso Porzio

Yale University

Nancy Qian

Yale University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 2012

Abstract

Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries. Motivated by this fact, we conduct a development accounting exercise that allows the returns to experience to vary across countries but is otherwise standard. When the country-specific returns to experience are interpreted in such a development accounting framework -- and are therefore accounted for as part of human capital -- we find that human and physical capital differences can account for almost two thirds of the variation in cross-country income differences, as compared to less than half in previous studies.

Keywords: Cross-country income, Development Accounting, Returns to Experience

JEL Classification: O11

Suggested Citation

Lagakos, David and Moll, Benjamin and Porzio, Tommaso and Qian, Nancy, Experience Matters: Human Capital and Development Accounting (December 2012). CEPR Discussion Paper No. DP9253, Available at SSRN: https://ssrn.com/abstract=2210223

David Lagakos (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Benjamin Moll

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

Tommaso Porzio

Yale University ( email )

New Haven, CT 06520
United States

Nancy Qian

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
2
Abstract Views
622
PlumX Metrics