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Do Nations Combine O-Rings with Cobb-Douglas? Evidence from agriculture, equipment production, and the informal sector


  • Oasis, Kodila-Tedika


The article focuses on the conditional relationship between various human capital proxies and the size of potential “O-Ring” or “Cobb-Douglas” sectors. We find that that years of schooling are a robust negative predictor of the size of the informal sector, conditioned on national average test scores, suggests that the signaling and acculturation mechanisms of schooling may help shift potentially productive workers into the formal economy.

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  • Oasis, Kodila-Tedika, 2013. "Do Nations Combine O-Rings with Cobb-Douglas? Evidence from agriculture, equipment production, and the informal sector," MPRA Paper 51347, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:51347

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    References listed on IDEAS

    1. Jones, Garett, 2013. "The O-ring sector and the Foolproof sector: An explanation for skill externalities," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 1-10.
    2. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 551-575.
    3. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    4. Kodila-Tedika , Oasis, 2014. "Forget your gods: African evidence on the relation between state capacity and cognitive ability of leading politicians," European Economic Letters, European Economics Letters Group, vol. 3(1), pages 7-11.
    5. Isaac Kalonda-Kanyama & Oasis Kodila-Tedika, 2012. "Quality of Institutions : Does Intelligence Matter?," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 201206, University of Kansas, Department of Economics, revised Apr 2012.
    6. Oasis Kodila-Tedika, 2014. "Governance and Intelligence: Empirical Analysis from African Data," Journal of African Development, African Finance and Economic Association, vol. 16(1), pages 83-97.
    7. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    8. repec:hrv:faseco:30747160 is not listed on IDEAS
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    More about this item


    Intelligence; Human capital; Strategic complementarities; productivity;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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