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Second thoughts on development accounting

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  • Gundlach, Erich
  • Rudman, Desmond
  • Wößmann, Ludger

Abstract

We estimate the relative roles of factor inputs and productivity in explaining the level of economic development, which is measured as output per worker. For a large sample of countries, we show that alternative identifying productivity assumptions and alternative measures of human capital have a large impact on the relative weights of factor inputs and productivity in a decomposition of output per worker. For a sample of OECD countries, we find that productivity has almost no role in explaining cross-country differences in output per worker. This result supports the reasoning of a traditional neoclassical growth model.

Suggested Citation

  • Gundlach, Erich & Rudman, Desmond & Wößmann, Ludger, 1998. "Second thoughts on development accounting," Kiel Working Papers 895, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:895
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    References listed on IDEAS

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    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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