DP2498 Productivity Differences
|Author(s):||Daron Acemoglu, 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, Total Factor Productivity|
|JEL(s):||F43, O14, O34, O47|
|Programme Areas:||International Macroeconomics, Labour Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2498|
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.