A Revision to the Theory and the Practice of Development Accounting

R. Breton Theodore (tbreton@eafit.edu.co)

No 10924, Documentos de Trabajo de Valor Público from Universidad EAFIT

Abstract: Practitioners of development accounting assume that the private return on schooling equals its social marginal product. I show that this assumption is inconsistent with the mathematical structure of a multiplicative production function, which specifies that the private return is only a fraction of the social marginal product. I then show that the empirical results from development accounting in the literature substantially underestimate human capital’s contribution to national output and overestimate national productivity differences. ***** Los profesionales de la contabilidad del desarrollo asumen que el rendimiento privado de la educación es igual a su producto marginal social. Se Muestra que este supuesto es incompatible con la estructura matemática de una función multiplicativa de producción, que especifica que el rendimiento privado es sólo una fracción del producto marginal social. A continuación, se muestra que los resultados empíricos de la contabilidad del desarrollo en la literatura subestiman considerablemente la contribución del capital humano para la producción nacional y sobreestiman las diferencias de productividad nacional.

Keywords: Development accounting; Human capital; Physical Capital; Productivity (search for similar items in EconPapers)
JEL-codes: E25 O11 O47 (search for similar items in EconPapers)
Pages: 10
Date: 2014-03-16
New Economics Papers: this item is included in nep-his
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