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American Economic Review: Vol. 96 No. 3 (June 2006)
AER Volume. 96, Issue 3 | 
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The World Technology Frontier
Article Citation
Caselli, Francesco, and
Wilbur John Coleman. 2006. "The World Technology Frontier."
American Economic Review,
96(3): 499-522.
DOI: 10.1257/aer.96.3.499
DOI: 10.1257/aer.96.3.499
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)
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Authors
Caselli, Francesco
Coleman, Wilbur John II
Coleman, Wilbur John II
