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Development accounting using PIAAC data

Author

Listed:
  • Hidalgo-Cabrillana, Ana.

    (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)

  • Kuehn, Zoë.

    (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)

  • López-Mayan, Cristina.

    (Euncet Business School, Universidad Autónoma de Barcelona)

Abstract
We carry out a classical development accounting exercise using data from the Programme for the International Assessment of Adult Competencies" (PIAAC). PIACC data, available for 30 upper-middle and high-income countries and nationally representative for the working-age population, allow us to construct a multi- dimensional measure for the stock of human capital in each country, taking into account years of schooling, job experience, cognitive skills, on-the-job-training, and health. Individual level PIAAC data for the US are then used to estimate the weight of each dimension in the human capital composite by running Mincerian wage regressions. We find that differences in physical capital together with our broad measure of human capital account for 41% of the variance in output per worker, compared to only 27% when proxying human capital by average years of schooling only. Differences in cognitive skills play the largest role while experience and health are of lesser importance.

Suggested Citation

  • Hidalgo-Cabrillana, Ana. & Kuehn, Zoë. & López-Mayan, Cristina., 2017. "Development accounting using PIAAC data," Working Papers in Economic Theory 2017/02, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    • Handle: RePEc:uam:wpaper:201702
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    References listed on IDEAS

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    Cited by:

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    3. Chyul-Young Jyung & Yoowoo Lee & Sunyoung Park & Eunhye Cho & Romi Choi, 2020. "Factors Affecting Employees’ Problem-Solving Skills in Technology-Rich Environments in Japan and Korea," Sustainability, MDPI, vol. 12(17), pages 1-16, August.
    4. Obiols-Homs, F. & Sánchez-Marcos, V., 2018. "Education outcomes and the labor market," Labour Economics, Elsevier, vol. 54(C), pages 14-28.
    5. Campbell, Susanna G. & Üngör, Murat, 2020. "Revisiting human capital and aggregate income differences," Economic Modelling, Elsevier, vol. 91(C), pages 43-64.

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    More about this item

    Keywords

    development accounting; multi-dimensional human capital measure; PIAAC; Mincerian wage equation;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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