7/17/2019 Hall and Jones quinta parte

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that differences in social infrastructure across countries account

for much of the difference in long-run economic performance

around the world.

II. LEVELS ACCOUNIN!

Our anal"sis #egins #" e$amining the pro$imate causes of 

economic success. %e decompose differences in output per wor&er 

across countries into differences in inputs and differences in

 producti'it".

here are three approaches to the decomposition of output

 per wor&er into inputs and producti'i t". One was de'eloped #"

Christensen( Cummings( and )orgenson *+,+ and in'ol'es the

comparison of each countr" to a reference point . A countr" /s

 producti'it" residual is formed #" weighting the log-differences of 

each factor input f rom the reference point #" the ar i thmet ic

a'erage of the countr" /s factor share and the reference factor 

share. he second is similar( e$cept that the factor shares are

assumed t o #e t he same fo r a l l coun t r i e s 0 t h i s amoun t s t o

calculating the residual from a Co##-1ouglas technolog". 2inall"(

there is a method #ased directl" on Solow *+,34( discussed in a

 predecessor to this paper( 5all and )ones *+,,6( and summari7ed

 #elow. 8ecause the Solow method gi'es results 9uite similar to

those #ased on Christensen( Cummings( and )orgenson or on

Co##-1ouglas with standard elasticities( we will not dwell on this

aspect of the wor&. %e present resul ts #ased on the simplest

Co##-1ouglas approach.

Assume that output :i in countr" i is produced according to

; + < : i = K c f ( A i  H d l T h

where  K i  denotes the stoc& of ph"sical capital(  H i  is the amount of 

human capital-augmented la#or used in production( and A is ala#or-augmenting measure of producti'it". %e assume that la#or  Li

is homogeneous within a countr" and that each unit of la#or has #eentrained with  E i   "ears of schooling ;education<. 5uman capital-augmented la#or is gi'en #"

;=< 5i >

In this specification the function 43(E) reflects the efficienc" of a

unit of la#or with  E "ears of schooling relati'e to one with no

schooling %O< > ?<. he deri'ati'e ;+</;E< is the return to school ing

estimated in a @incerian wage regression *@incer +,4B an

OUTPUT PER WORKER ACROSS COUNTRIES  4