American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The World Technology Frontier
American Economic Review
(pp. 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)Citation
Caselli, Francesco, and Wilbur John Coleman II. 2006. "The World Technology Frontier." American Economic Review 96 (3): 499–522. DOI: 10.1257/aer.96.3.499Additional Materials
JEL Classification
- I21 Analysis of Education
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O33 Technological Change: Choices and Consequences; Diffusion Processes