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Life-Cycle Human Capital Accumulation Across Countries: Lessons From U.S. Immigrants

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  • David Lagakos
  • Benjamin Moll
  • Tommaso Porzio
  • Nancy Qian
  • Todd Schoellman

Abstract

How much does life-cycle human capital accumulation vary across countries? This paper seeks to answer this question by studying U.S. immigrants, who come from a wide variety of countries but work in a common labor market. We document that returns to potential experience among U.S. immigrants are higher on average for workers coming from rich countries than for those coming from poor countries. To understand this fact we build a model of life-cycle human capital accumulation that features three potential theories, working respectively through cross-country differences in: selection, skill loss, and human capital accumulation. To distinguish between theories, we use new data on the characteristics of immigrants and non-migrants from a large set of countries. We conclude that the most likely theory is that immigrants from poor countries accumulate relatively less human capital in their birth countries before migrating. Our findings imply that life cycle human capital stocks are on average much larger in rich countries than poor countries.

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  • David Lagakos & Benjamin Moll & Tommaso Porzio & Nancy Qian & Todd Schoellman, 2016. "Life-Cycle Human Capital Accumulation Across Countries: Lessons From U.S. Immigrants," NBER Working Papers 21914, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21914
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    Cited by:

    1. Rossi,Federico, 2018. "Human Capital and Macro-Economic Development : A Review of the Evidence," Policy Research Working Paper Series 8650, The World Bank.
    2. De Magalhães, Leandro & Santaeulàlia-Llopis, Raül, 2018. "The consumption, income, and wealth of the poorest: An empirical analysis of economic inequality in rural and urban Sub-Saharan Africa for macroeconomists," Journal of Development Economics, Elsevier, vol. 134(C), pages 350-371.
    3. Lagakos, David & Moll, Benjamin & Porzio, Tommaso & Qian, Nancy, 2012. "Experience Matters: Human Capital and Development Accounting," CEPR Discussion Papers 9253, C.E.P.R. Discussion Papers.
    4. Federico Rossi, 2019. "The Relative Efficiency of Skilled Labor across Countries: Measurement and Interpretation," 2019 Meeting Papers 829, Society for Economic Dynamics.
    5. Busch, Christopher & Krueger, Dirk & Ludwig, Alexander & Popova, Irina & Iftikhar, Zainab, 2020. "Should Germany have built a new wall? Macroeconomic lessons from the 2015-18 refugee wave," Journal of Monetary Economics, Elsevier, vol. 113(C), pages 28-55.
    6. Selahattin İmrohoroğlu & Sagiri Kitao & Tomoaki Yamada, 2017. "Can Guest Workers Solve Japan'S Fiscal Problems?," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1287-1307, July.
    7. Serge Coulombe & Gilles Grenier & Serge Nadeau, 2014. "Quality of Work Experience and Economic Development: Estimates Using Canadian Immigrant Data," Journal of Human Capital, University of Chicago Press, vol. 8(3), pages 199-234.
    8. Chernina, Eugenia & Gimpelson, Vladimir, 2022. "Do Wages Grow with Experience? Deciphering the Russian Puzzle," IZA Discussion Papers 15068, Institute of Labor Economics (IZA).
    9. Jedwab,Remi Camille & Pereira,Daniel & Roberts,Mark, 2019. "Cities of Workers, Children, or Seniors? Age Structure and Economic Growth in a Global Cross-Section of Cities," Policy Research Working Paper Series 9040, The World Bank.
    10. Xiao Ma & Alejandro Nakab & Daniela Vidart, 2021. "Human Capital Investment and Development: The Role of On-the-job Training," Working papers 2021-10, University of Connecticut, Department of Economics, revised Aug 2022.
    11. Abdulla, Kanat, 2020. "Human capital accumulation: Evidence from immigrants in low-income countries," Journal of Comparative Economics, Elsevier, vol. 48(4), pages 951-973.
    12. Remi Jedwab & Asif Islam & Paul Romer & Robert Samaniego, 2020. "Human Capital Accumulation at Work: Estimates for the World and Implications for Development," Working Papers 2020-3, The George Washington University, Institute for International Economic Policy.
    13. Yashiv, Eran, 2020. "Moving from a Poor Economy to a Rich One: The Contradictory Roles of Technology and Job Tasks," IZA Discussion Papers 13131, Institute of Labor Economics (IZA).
    14. Rosario Aldunate, 2019. "Returns to Work Experience in Chile," Working Papers Central Bank of Chile 855, Central Bank of Chile.
    15. Ana Hidalgo-Cabrillana & Zoë Kuehn & Cristina Lopez-Mayan, 2017. "Development accounting using PIAAC data," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(4), pages 373-399, November.
    16. Eran Yashiv, 2020. "Moving from a Poor Economy to a Rich One: The Contradictory Roles of Technology and Job Tasks," Discussion Papers 2010, Centre for Macroeconomics (CFM).
    17. Dütsch Matthias & Himmelreicher Ralf, 2020. "Characteristics Contributing to Low- and Minimum-Wage Labour in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 161-200, April.
    18. Slichter, David & Taveras, Elisa & Monge, Daniela, 2021. "The Skills of Rich and Poor Country Workers," MPRA Paper 106050, University Library of Munich, Germany.
    19. Dütsch Matthias & Himmelreicher Ralf, 2020. "Characteristics Contributing to Low- and Minimum-Wage Labour in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 161-200, April.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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