We carry out a classical development accounting exercise using data from the “Programme for the International Assessment of Adult Competencies” (PIAAC). PIAAC data, available for 30 upper-middle and high-income countries and nationally representative for the working-age population, allow us...

Are labor markets in higher-income countries more meritocratic, in the sense that worker-job matching is based on skills rather than idiosyncratic attributes unrelated to productivity? If so, why? And what are the aggregate consequences? Using internationally comparable data on worker skills and...

This article presents revised estimates of the external rates of return on investment in schooling provided in “Schooling and National Income: How Large Are the Externalities?” The analysis is based on data for the same set of countries, but it incorporates methodological improvements that...

This paper uses a new data set for cumulative national investment in formal schooling and a new instrument for schooling to estimate the national return on investment in 61 countries. These estimates are combined with data on the private rate of return on investment in schooling to estimate the...

This paper tests the hypothesis that in a market economy investment in physical capital follows investment in schooling. It presents empirical evidence that in periods since the 19th century when global financial capital was widely available, increases in each nation's physical capital stock and...

The marginal product of human capital in Mankiw, Romer, and Weil's [1992] augmented Solow model measures the direct and two external effects of human capital created from schooling on national income. If this model is valid, its estimates of the share of this marginal product accruing to workers...

In 1960 Theodore Schultz expounded a human capital theory of economic growth that includes three elements: 1) Countries without much human capital cannot manage physical capital effectively, 2) Economic growth can only proceed if physical capital and human capital rise together, and 3) Human...

The paper presents a human capital based theory of the sectoral transformation along the balanced growth path equilibrium. Allowing a small upward trend in the productivity of the human capital sector, combined with differential human capital intensity and constant productivity across sectors,...

Do high levels of human capital foster economic growth by facilitating technology adoption? If so, countries with more human capital should have adopted more rapidly the skilled-labor augmenting technologies becoming available since the 1970's. High human capital levels should therefore have...