ERIC Number: ED502004
Record Type: Non-Journal
Publication Date: 2008-Jun
Abstractor: As Provided
The Knowledge Trap: Human Capital and Development Reconsidered. NBER Working Paper No. 14138
Jones, Benjamin F.
National Bureau of Economic Research
This paper presents a model where human capital differences--rather than technology differences--can explain several central phenomena in the world economy. The results follow from the educational choices of workers, who decide not just how long to train, but also how broadly. A "knowledge trap" occurs in economies where skilled workers favor broad but shallow knowledge. This simple idea can inform cross-country income differences, international trade patterns, poverty traps, and price and wage differences across countries in a manner broadly consistent with existing empirical evidence. The model also provides insights about the brain drain, migration, and the role for multinationals in development. More generally, this paper shows that standard human capital accounting methods can severely underestimate the role of education in development. It shows how endogenous educational decisions can replace exogenous technology differences in a range of economic reasoning.
Descriptors: Human Capital, International Trade, Role of Education, Skilled Workers, Brain Drain, Models, Economics, Economic Development, Differences, Economic Impact, Technology, Research Methodology, Economic Status, Economic Research
National Bureau of Economic Research. 1050 Massachusetts Avenue, Cambridge, MA 02138-5398. Tel: 617-588-0343; Web site: http://www.nber.org/cgi-bin/get_bars.pl?bar=pub
Publication Type: Reports - Descriptive
Education Level: Adult Education
Authoring Institution: National Bureau of Economic Research, Cambridge, MA.