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American Economic Review: Vol. 92 No. 1 (March 2002)

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How Important Is Human Capital for Development? Evidence from Immigrant Earnings

Article Citation

Hendricks, Lutz. 2002. "How Important Is Human Capital for Development? Evidence from Immigrant Earnings ." American Economic Review, 92(1): 198-219.

DOI: 10.1257/000282802760015676

Abstract

This paper offers new evidence on the sources of cross-country income differences. It exploits the idea that observing immigrant workers from different countries in the same labor market provides an opportunity to estimate their human-capital endowments. These estimates suggest that human and physical capital account for only a fraction of cross-country income differences. For countries below 40 percent of U.S. output per worker, less than half of the output gap relative to the United States is attributed to human and physical capital. (JEL O15, O41, F22)

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Hendricks, Lutz (Department of Economics, Arizona State University, P.O Box 873806, Tempe AZ 85287, US)


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