NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Knowledge Trap: Human Capital and Development Reconsidered

Benjamin F. Jones

NBER Working Paper No. 14138
Issued in June 2008
NBER Program(s):   ED   EFG   PR

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.

download in pdf format
   (416 K)

email paper

This paper is available as PDF (416 K) or via email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14138

Users who downloaded this paper also downloaded these:
Jones w17487 The Human Capital Stock: A Generalized Approach
Whalley and Zhao w16592 The Contribution of Human Capital to China’s Economic Growth
Mincer w0803 Human Capital and Economic Growth
Jones and Romer w15094 The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital
Kenen Skills, Human Capital, and Comparative Advantage
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us