Why do some countries produce so much more output per worker than others? - A note
AbstractIn an important paper, Hall and Jones (1999) show that international differences in output per worker across 127 countries in 1988 are fundamentally determined by variations in, what they term, a country's ``social infrastructure''. This paper conducts a robustness check of their findings by implementing a testing framework that is radically different to their approach. Specifically, we estimate a stochastic, rather than a deterministic, production frontier and we also model the potential role of social infrastructure in explaining productivity in a single step, rather than the statistically unsatisfactory two-step method used by Hall and Jones. We obtain two important findings that are strongly supportive of Hall and Jones' results. First, the bulk of inter-country variation in output per worker is accounted for by differences in productivity. Second, social infrastructure is found to be a highly significant variable in explaining inter-country productivity differences.
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Bibliographic InfoPaper provided by Central Bank of Ireland in its series Research Technical Papers with number 9/RT/04.
Length: 12 pages
Date of creation: Dec 2004
Date of revision:
Other versions of this item:
- Boyle, G.E. & McQuinn, K., 2003. "Why do some countries produce so much more output per worker than others? A note," Economics, Finance and Accounting Department Working Paper Series n1331103, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
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