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Trade and human capital accumulation: evidence from U.S. immigrants

  • Domeland, Dorte
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    This study provides empirical evidence that trade increases on-the-job human capital accumulation by estimating the effect of home country openness on estimated returns to home country experience of U.S. immigrants. The positive effect of trade on on-the-job human capital accumulation remains significant when controlling for GDP, educational attainment, and institutional quality. It is not the result of self-selection, heterogeneity in returns to experience, English-speaking origin, or cultural background. The effect persists when restricting the sample to non-OECD countries, thereby resolving the theoretical ambiguity of whether trade increases or decreases learning-by-doing. The role of trade in generating economic growth is therefore likely to be more important than generally considered.

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    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4144.

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    Date of creation: 01 Mar 2007
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    Handle: RePEc:wbk:wbrwps:4144
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