Central Data Catalog

Citation Information

Type Working Paper - NBER Working Paper No. 18602
Title Experience Matters. Human Capital and Development Accounting
Publication (Day/Month/Year) 2012
URL http://aida.wss.yale.edu/~nq3/NANCYS_Yale_Website/resources/papers/Exp_20140903_BM.pdf
Abstract
Using recently available large-sample micro data from 36 countries, we document that experience-earnings profiles are flatter in poor countries than in rich countries. Motivated by this fact, we conduct a development accounting exercise that allows the returns to experience to vary across countries but is otherwise standard. When the country-specific returns to experience are interpreted in such a development accounting framework – and are therefore accounted for as part of human capital – we find that human and physical capital differences can account for almost two thirds of the variation in cross-country income differences, as compared to less than half in previous studies.

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