Why Do Some Countries Produce so Much More Output Per Worker than Others?

51 Pages Posted: 10 Jun 2000 Last revised: 8 Mar 2010

See all articles by Robert E. Hall

Robert E. Hall

Hoover Institution and Department of Economics, Stanford University; National Bureau of Economic Research (NBER)

Charles I. Jones

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: June 1999

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.

Suggested Citation

Hall, Robert E. and Jones, Charles I., Why Do Some Countries Produce so Much More Output Per Worker than Others? (June 1999). NBER Working Paper No. w6564. Available at SSRN: https://ssrn.com/abstract=226297

Robert E. Hall (Contact Author)

Hoover Institution and Department of Economics, Stanford University ( email )

Stanford, CA 94305-6010
United States
650-723-2215 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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650-723-2215 (Phone)

Charles I. Jones

Stanford Graduate School of Business ( email )

Stanford GSB
655 Knight Way
Stanford, CA 94305-4800
United States
650-725-9265 (Phone)

HOME PAGE: http://www.stanford.edu/~chadj

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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