Citation

Discussion Paper Details

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Title: Productivity Differences

Author(s): Daron Acemoglu and Fabrizio Zilibotti

Publication Date: July 2000

Keyword(s): Development, Directed Technical Change, Human Capital, Intellectual Property Rights, Labour Productivity, Sectoral TFP Differences, Technology-Skill Mismatch and Total Factor Productivity

Programme Area(s): International Macroeconomics and Labour Economics

Abstract: Many technologies used by the LDCs are developed in the OECD economies and are designed to make optimal use of the skills of these richer countries' workforces. Differences in the supply of skills create a mismatch between the requirements of these technologies and the skills of LDC workers, and lead to low productivity in the LDCs. Even when all countries have equal access to new technologies, this technology-skill mismatch can lead to sizeable differences in total factor productivity and output per worker. We provide evidence in favour of the cross-industry productivity patterns predicted by our model, and also show that technology-skill mismatch could account for a large fraction of the observed output per worker differences in the data.

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Bibliographic Reference

Acemoglu, D and Zilibotti, F. 2000. 'Productivity Differences'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2498