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  4. March 2002
  5. How Important Is Human Capital for Development? Evidence from Immigrant Earnings

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

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

  • Lutz Hendricks
American Economic Review
vol. 92, no. 1, March 2002
(pp. 198–219)
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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)

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

JEL Classification

  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • O47 Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
  • J61 Geographic Labor Mobility; Immigrant Workers
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration