Experience Matters: Human Capital and Development Accounting

Nancy Qian, David Lagakos, Benjamin Moll and Tommaso Porzio

No 9253, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries. Motivated by this fact, we conduct a development accounting exercise that allows the returns to experience to vary across countries but is otherwise standard. When the country-specific returns to experience are interpreted in such a development accounting framework -- and are therefore accounted for as part of human capital -- we find that human and physical capital differences can account for almost two thirds of the variation in cross-country income differences, as compared to less than half in previous studies.

Keywords: Cross-country income; Development accounting; Returns to experience (search for similar items in EconPapers)
JEL-codes: O11 (search for similar items in EconPapers)
Date: 2012-12
New Economics Papers: this item is included in nep-dev and nep-hrm
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Citations: View citations in EconPapers (29)

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Related works:
Working Paper: Experience Matters: Human Capital and Development Accounting (2012)
Working Paper: Experience Matters: Human Capital and Development Accounting (2012)
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