 The Human Capital Stock: A Generalized Approach. CommentFrancesco Caselli and Antonio Ciccone No 12451, CEPR Discussion Papers from C.E.P.R. Discussion Papers Abstract: Jones (2014) considers development accounting when workers with different schooling are imperfect substitutes. His main result is that, using plausible values for the elasticity of substitution between workers with different educational attainment, measured human capital variation can be boosted to the point that factors of production account for the totality of the variation in income across countries. We show that the amplification of cross-country human capital differences achieved by Jones, and hence his success at removing the unexplained component of income differences, is entirely due to an assumption that the relative wage of skilled workers is solely determined by attributes of workers (once the supply of skilled workers is accounted for). If, as we argue, skill premia are also influenced by technology, institutions, and other features of the economic environment, cross-country differences in human capital as measured by Jones will embed differences in these technological, institutional, and other attributes. As a result, Jones's conclusion that human capital can account for all the variation in income across countries is unwarranted. Date: 2017-11 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12451 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX. |
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