Human Capital and the Wealth of Nations

Rodolfo Manuelli and Ananth Seshadri

American Economic Review, 2014, vol. 104, issue 9, 2736-62

Abstract: We reevaluate the role of human capital in determining the wealth of nations. We use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries. Our model can explain differences in schooling and earnings profiles and consequently estimates of Mincerian rates of return across countries. We find that effective human capital per worker varies substantially across countries. Cross-country differences in Total Factor Productivity (TFP) are significantly smaller than found in previous studies. Our model implies that output per worker is highly responsive to changes in TFP and demographic variables.

JEL-codes: E23 I25 J24 J31 O47 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.9.2736
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Citations: View citations in EconPapers (123)

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Working Paper: Human Capital and the Wealth of Nations (2005)
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