Talent Utilization, a Source of Bias in Measuring TFP

14 Pages Posted: 28 Nov 2006

Date Written: November 2006

Abstract

This paper analyzes a model of economic growth that explains differences in economic structure across countries. It highlights the interplay between productivity, talents utilization and entrepreneurship incentives. The paper has two main results. First, it argues that when measuring human capital we ignore one dimension, which is talents utilization. It is suggested then that, in development accounting, human capital is inaccurately measured. Second, it shows that the magnitude of talents utilization increases with the level of development. Thus, the paper suggests that talents utilization amplifies differences in productivity and contributes to the explanation of large observed international differences in per capita income.

Keywords: Total Factor Productivity, Talents, Income levels

JEL Classification: L16, O11, O14, O33, O47

Suggested Citation

Zoabi, Hosny, Talent Utilization, a Source of Bias in Measuring TFP (November 2006). Available at SSRN: https://ssrn.com/abstract=947578 or http://dx.doi.org/10.2139/ssrn.947578

Hosny Zoabi (Contact Author)

New Economic School (NES) ( email )

100A Novaya Street
Moscow, Skolkovo 143026
Russia

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