Distance, Skill Deepening and Development: Will Peripheral Countries Ever Get Rich?
43 Pages Posted: 4 Mar 2003
There are 2 versions of this paper
Distance, Skill Deepening and Development: Will Peripheral Countries Ever Get Rich?
Date Written: February 2003
Abstract
Do workers in countries located far from global economic activity have lower incentives to accumulate human capital than workers near the centre? This Paper models the relationship between countries' distance from global economic activity, endogenous investments in education, and economic development. Firms in remote locations pay greater trade costs on both their exports and their imports of intermediate inputs, reducing the amount of value added left to remunerate domestic factors of production. As a result, the skill premium and incentives to accumulate human capital will be depressed if skill-intensive sectors have higher trade costs, more pervasive input-output linkages, or stronger increasing returns to scale. Empirically, we exploit structural relationships from the model to demonstrate that countries with lower market access have lower levels of educational attainment and that the world's most peripheral countries are becoming increasingly remote over time.
Keywords: Economic geography, international inequality, international trade
JEL Classification: F12, F14, O10
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Distance, Skill Deepening and Development: Will Peripheral Countries Ever Get Rich?
-
Can Australia Match US Productivity Performance?
By Ben Dolman, Dean Parham, ...
-
The Contribution of Economic Geography to GDP Per Capita
By Herve Boulhol, Alain De Serres, ...
-
Skills, Agglomeration and Segmentation
By Tomoya Mori and Alessandro Turrini
-
Have Developed Countries Escaped the Curse of Distance?
By Herve Boulhol and Alain De Serres
-
Consorting in New South Wales: Substantive Offence or Police Power?
By Alex Steel