Productivity Differences

49 Pages Posted: 13 Jul 2000

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Fabrizio Zilibotti

Yale University; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: January 1999

Abstract

Many technologies used by the LDCs are developed in the OECD economies, and as such are designed to make optimal use of the skills of these richer countries' workforces. Due to differences in the supply of skills, some of the tasks performed by skilled workers in the OECD economies will be carried out by unskilled workers in the LDCs. Since the technologies in these tasks are designed to be used by skilled workers, productivity in the LDCs will be low. Even when all countries have equal access to new technologies, this mismatch between skills and technology can lead to sizable differences in total factor productivity and output per worker. Our theory also suggests that productivity differences should be highest in medium-tech sectors, and that the trade regime and the degree of intellectual property right enforcement in the LDCs have an important effect on the direction of technical change and on productivity differences.

Suggested Citation

Acemoglu, Daron and Zilibotti, Fabrizio, Productivity Differences (January 1999). NBER Working Paper No. w6879, Available at SSRN: https://ssrn.com/abstract=227628

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Fabrizio Zilibotti

Yale University ( email )

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Centre for Economic Policy Research (CEPR)

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