The World Technology Frontier

Francesco Caselli and Wilbur Coleman

American Economic Review, 2006, vol. 96, issue 3, 499-522

Abstract: We study cross-country differences in the aggregate production function when skilled and unskilled labor are imperfect substitutes. We find that there is a skill bias in cross-country technology differences. Higher-income countries use skilled labor more efficiently than lower-income countries, while they use unskilled labor relatively and, possibly, absolutely less efficiently. We also propose a simple explanation for our findings: rich countries, which are skilled-labor abundant, choose technologies that are best suited to skilled workers; poor countries, which are unskilled-labor abundant, choose technologies more appropriate to unskilled workers. We discuss alternative explanations, such as capital-skill complementarity and differences in schooling quality. (JEL E13, E23, J31, O14)

Date: 2006
Note: DOI: 10.1257/aer.96.3.499
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Citations: View citations in EconPapers (468)

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Related works:
Working Paper: The World Technology Frontier (2000)
Working Paper: The World Technology Frontier (2000)
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