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Why do South Korean firms produce so much more output per worker than Ghanaian ones?

  • Francis Teal
  • Simon Baptist
Registered author(s):

    The labour productivity differentials between manufacturing firms in Ghana and South Korea exceed those implied by macro analysis.� Median value-added per employee is nearly 40 times higher in South Korea than Ghana.� The most important single factor in explaining this difference is the Mincerian return to skills which differ by a factor of three between Ghana and South Korea.� There is no significant difference in total factor productivity across the countries once we allow for human capital.� Our results are consistent with those who have argued that rises in the return to education within developed countries can be explained by skill-biased technical progress in those economies.� They are also consistent with work in developing countries which finds a convex return to education based on individual labour market data.� Allowing for differences in the shape of the relationship between productivity and human capital across countries is crucial for understanding the role of human capital in increasing productivity.

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    File URL: http://www.csae.ox.ac.uk/workingpapers/pdfs/2008-10text.pdf
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    Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/2008-10.

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    Date of creation: 01 Feb 2008
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    Handle: RePEc:oxf:wpaper:wps/2008-10
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    Web page: http://www.economics.ox.ac.uk/
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    7. David Card & John E. DiNardo, 2002. "Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," NBER Working Papers 8769, National Bureau of Economic Research, Inc.
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    11. Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Catherine Pattillo & Måns Söderbom & Francis Teal & Albert Zeu, 2002. "Do African Manufacturing Firms Learn from Exporting?," CSAE Working Paper Series 2002-09, Centre for the Study of African Economies, University of Oxford.
    12. Duraisamy, P., 2002. "Changes in returns to education in India, 1983-94: by gender, age-cohort and location," Economics of Education Review, Elsevier, vol. 21(6), pages 609-622, December.
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    15. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
    16. Bowsher, Clive G., 2002. "On testing overidentifying restrictions in dynamic panel data models," Economics Letters, Elsevier, vol. 77(2), pages 211-220, October.
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    18. Acemoglu, Daron, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 779-804, August.
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