Why do Some Countries Produce So Much More Output Per Worker than Others?

Output per worker varies enormously across countries. Why? On an accounting basis our analysis shows that differences in physical capital and educational attainment can only partially explain the variation in output per worker-we find a large amount of variation in the level of the Solow residual ac...

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Bibliographic Details
Published in:The Quarterly journal of economics 1999-02, Vol.114 (1), p.83-116
Main Authors: Hall, Robert E., Jones, Charles I.
Format: Article
Language:English
Subjects:
Comparative advantage (Commerce)
Comparative studies
Economic growth rate
Economic indicators
Economic theory
Economics
Educational attainment
Ethnolinguistics
Government corruption
Human capital
Industrial productivity
International aspects
Labor productivity
Manycountries
Missing data
Output
Production (Economics)
Production functions
Productivity
Regional disparities (Economics)
Social aspects
Social economics
Social policy
Statistical analysis
Structural capital
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Summary:Output per worker varies enormously across countries. Why? On an accounting basis our analysis shows that differences in physical capital and educational attainment can only partially explain the variation in output per worker-we find a large amount of variation in the level of the Solow residual across countries. At a deeper level, we document that the differences in capital accumulation, productivity, and therefore output per worker are driven by differences in institutions and government policies, which we call social infrastructure. We treat social infrastructure as endogenous, determined historically by location and other factors captured in part by language.
ISSN:0033-5533
1531-4650
DOI:10.1162/003355399555954