Quality of Institutions and the Allocation of Talent: Cross‐National Evidence

43 Pages Posted: 28 May 2020 Last revised: 26 Oct 2020

See all articles by Timur Natkhov

Timur Natkhov

National Research University Higher School of Economics

Leonid Polishchuk

National Research University Higher School of Economics

Date Written: November 2019

Abstract

Strong institutions attract talent to productive activities, whereas weak ones raise the appeal of redistribution. We find a strong positive cross‐country association between the quality of institutions and graduation of university students in science, and an even stronger negative correlation with graduation in law. These findings are robust to various specifications of empirical models. We also demonstrate that institutions dominate other factors affecting the allocation of talent. Finally, we present direct evidence that (mis)allocation of talent between productive and unproductive activities driven by institutional quality explains the discrepancy between private and public returns to education.

Suggested Citation

Natkhov, Timur and Polishchuk, Leonid, Quality of Institutions and the Allocation of Talent: Cross‐National Evidence (November 2019). Kyklos, Vol. 72, Issue 4, pp. 527-569, 2019, Available at SSRN: https://ssrn.com/abstract=3613097 or http://dx.doi.org/10.1111/kykl.12211

Timur Natkhov (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Leonid Polishchuk

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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