Fundamental Determinants of Output Per Worker Across Countries
Stanford Economics Working Paper No. 97-021
48 Pages Posted: 15 Mar 1998
Output per worker varies enormously across countries. Why? Our analysis shows that differences in social infrastructure are important sources of this variation. According to our results, a high-productivity country (i) has institutions that favor production over diversion, (ii) has a low rate of government consumption, (iii) is open to international trade, (iv) has at least some private ownership, (v) speaks an international language, and (vi) is located in a temperate latitude far from the equator. A favorable social infrastructure helps a country both by stimulating the accumulation of human and physical capital and by raising its total factor productivity.
JEL Classification: E23, O47
Suggested Citation: Suggested Citation