American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Relative Efficiency of Skilled Labor across Countries: Measurement and Interpretation
American Economic Review
vol. 112,
no. 1, January 2022
(pp. 235–66)
Abstract
I study how the relative efficiency of high- and low-skill labor varies across countries. Using microdata 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.Citation
Rossi, Federico. 2022. "The Relative Efficiency of Skilled Labor across Countries: Measurement and Interpretation." American Economic Review, 112 (1): 235–66. DOI: 10.1257/aer.20191852Additional Materials
JEL Classification
- I26 Returns to Education
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- J61 Geographic Labor Mobility; Immigrant Workers
- L16 Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration