The Relative Efficiency of Skilled Labor across Countries: Measurement and Interpretation
American Economic Review · 2022 · Volume 112 · Issue 1
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.
Keywords
Returns to Education, Human Capital, Skills, Occupational Choice, Labor Productivity, Wage Level and Structure, Wage Differentials, Geographic Labor Mobility, Immigrant Workers, Industrial Organization and Macroeconomics: Industrial Structure and Structural Change, Industrial Price Indices, Economic Development: Human Resources, Human Development, Income Distribution, Migration
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