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Revisiting human capital and aggregate income differences

Susanna G. Campbell and Murat Üngör ()

Economic Modelling, 2020, vol. 91, issue C, 43-64

Abstract: We revisit human capital and development accounting. In quantifying human capital, we split it into three components; schooling (years of education), cognitive skills (as proxied by test score results), and a health indicator (for which adult survival rates are used). Our calculations are reported for a substantive cross-section of countries for the year 2000. According to our most conservative estimates, the most complete measure of human capital accounts for 19–28% of differences in output per worker across countries, but when excluding the health component this value falls to 17–22%, and further to 13–14% when only considering schooling. We present group comparisons, finding for some regions values as large as 40–50%.

Keywords: Development accounting; Human capital; Cognitive skills; Schooling; Health (search for similar items in EconPapers)
JEL-codes: I25 O11 O40 O47 O57 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.econmod.2020.05.016

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