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Trading Population for Productivity: Theory and Evidence

Oded Galor () and Andrew Mountford ()

No 2008-2, Working Papers from Brown University, Department of Economics

Abstract: This research argues that the di¤erential e¤ect of international trade on the demand for human capital across countries has been a major determinant of the distribution of income and population across the globe. In developed countries the gains from trade have been directed towards investment in education and growth in income per capita, whereas a signi?cant portion of these gains in less developed economies have been channeled towards population growth. Cross-country regressions establish that indeed trade has positive e¤ects on fertility and negative e¤ects on education in non-OECD economies, while inducing fertility decline and human capital formation in OECD economies.

Date: 2008
New Economics Papers: this item is included in nep-hrm and nep-int
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