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Talent, labor quality, and economic development

German Cubas (), B Ravikumar and Gustavo Ventura

No 2013-027, Working Papers from Federal Reserve Bank of St. Louis

Abstract: We develop a theory of labor quality based on (i) the division of the labor force> between unskilled and skilled workers and (ii) investments in skilled workers. In our> theory, countries differ in two key dimensions: talent and total factor productivity> (TFP). We measure talent using the observed achievement levels from the Programme> for International Student Assessment (PISA) scores. Our findings imply that the qual-> ity of labor in rich countries is about twice as large as the quality in poor countries.> Thus, the implied disparities in TFP levels are smaller relative to the standard growth> model using a measure of labor quality based on Mincer returns. In our model, the> resulting elasticity of output per worker with respect to TFP is about 2.

Keywords: Economic development; Education - Economic aspects; Labor productivity (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dge, nep-eff, nep-hrm, nep-lab, nep-lam, nep-lma, nep-ltv, nep-neu and nep-ure
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Journal Article: Talent, Labor Quality, and Economic Development (2016) Downloads
Working Paper: Talent, Labor Quality and Economic Development (2012) Downloads
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