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Talent Utilization, a Source of Bias in Measuring TFP
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1830-7728
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EUI MWP; 2007/18
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ZOABI, Hosny, Talent Utilization, a Source of Bias in Measuring TFP, EUI MWP, 2007/18 - https://hdl.handle.net/1814/7354
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.