“Why Do Some Countries Produce So Much More Output Per Worker Than Others?”, 1999-02-01 (; backlinks; similar):
Output per worker varies enormously across countries. Why?
On an accounting basis our analysis shows that differences in physical capital and educational attainment can only partially explain the variation in output per worker—we find a large amount of variation in the level of the Solow residual across countries. At a deeper level, we document that the differences in capital accumulation, productivity, and therefore output per worker are driven by differences in institutions and government policies, which we call social infrastructure.
We treat social infrastructure as endogenous, determined historically by location and other factors captured in part by language.
…In 1988 output per worker in the United States was more than 35× higher than output per worker in Niger. In just over 10 days the average worker in the United States produced as much as an average worker in Niger produced in an entire year [365 days]. Explaining such vast differences in economic performance is one of the fundamental challenges of economics.
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