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

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: 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

Hall, Robert E. and Jones, Charles I., Why Do Some Countries Produce so Much More Output Per Worker than Others? (March 11, 1998). Stanford University Working Paper No. 98-007. Available at SSRN: https://ssrn.com/abstract=3595 or http://dx.doi.org/10.2139/ssrn.3595

Robert E. Hall

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
United States
650-723-2215 (Phone)

Charles I. Jones (Contact Author)

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)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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