TY  - JOUR
AU  - Jones,Benjamin F.
TI  - The Knowledge Trap:  Human Capital and Development Reconsidered
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14138
PY  - 2008
Y2  - June 2008
UR  - http://www.nber.org/papers/w14138
L1  - http://www.nber.org/papers/w14138.pdf
N1  - Author contact info:
Benjamin Jones
Northwestern University
Kellogg School of Management
Department of Management and Strategy
2001 Sheridan Road
Evanston, IL  60208
Tel: 847/491-3177
Fax: 847/467-1777
E-Mail: bjones@kellogg.northwestern.edu
AB  - 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.
ER  -