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Why Do Some Countries Produce So Much More Output per Worker than Others?

  • Robert E. Hall
  • Charles I. Jones

Output per worker varies enormously across countries. Why? On an accounting basis, our analysis shows that differences in physical capital and educational attainment can only partially explain the variation in output per worker we find a large amount of variation in the level of the Solow residual across countries. At a deeper level, we document that the differences in capital accumulation, productivity, and therefore output per worker are driven by differences in institutions and government policies, which we call social infrastructure. We treat social infrastructure as endogenous, determined historically by location and other factors captured in part by language.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6564.

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Date of creation: Jun 1999
Date of revision:
Publication status: published as The Quarterly Journal of Economics, vol. 114, no. 1, pp. 83-116, February 1999.
Handle: RePEc:nbr:nberwo:6564
Note: EFG
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