Cognitive Skill and Technology Diffusion: An Empirical Test

Posted: 24 Nov 2012

See all articles by Garett Jones

Garett Jones

George Mason University - Department of Economics; George Mason University - Mercatus Center

Date Written: 2012

Abstract

Cognitive skills are robustly associated with good national economic performance. How much of this is due to high-skill countries doing a better job of absorbing total factor productivity from the world's technology leader? Following Benhabib and Spiegel (Handbook of Economic Growth, 2005), who estimated the Nelson–Phelps technology diffusion model, I use the database of IQ tests assembled by [0115] and [0120] and find a robust relationship between national average IQ and total factor productivity growth. Controlling for IQ, years of education is of modest statistical significance. If IQ gaps between countries persist and model parameters remain stable, TFP levels are forecasted to sharply diverge, creating a “twin peaks” result. After controlling for IQ, few other growth variables are statistically significant.

Keywords: human capital, total factor productivity, diffusion, cognitive skill, Intelligence

JEL Classification: D24, J24, O47

Suggested Citation

Jones, Garett, Cognitive Skill and Technology Diffusion: An Empirical Test (2012). Economic Systems, Vol. 36, No. 3, 2012, Available at SSRN: https://ssrn.com/abstract=2179573

Garett Jones (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://economics.gmu.edu/people/gjonesb

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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