The Relative Efficiency of Skilled Labor across Countries: Measurement and Interpretation
- American Economic Review (Forthcoming)
I study how the relative efficiency of high- and low-skill labor varies across countries.
Using micro data for countries at different stages of development, I document that
differences in relative quantities and wages are consistent with high-skill workers being
relatively more productive in rich countries. I exploit variation in the skill premia of
foreign-educated migrants to discriminate between two possible drivers of this pattern:
cross-country differences in the skill bias of technology and in the relative human capital
of skilled labor. I find that the former is quantitatively more important, and discuss the
implications of this result for development accounting.
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