This paper, instrumented with six theorems, shows that differences between firms in labor productivity, capital intensity and relative demand for skilled labor can be explained by differences in the substitution parameters between capital, skilled and unskilled labor in the presence of skill biased technical change. D 2005 Elsevier B.V. All rights reserved.

A consensus appears to have emerged in the literature that per capita income levels and/or levels of productivity in the industrialized market economies have converged significantly over the last century, and especially since the end of the second world war (see, e.g., Abramovitz, Baumol, Baumol and Wolff, De Long, Dollar and Wolff, Dowrick and Nguyen). The results of Abramovitz and Baumol, in ...

Why do nations fail? Wolcott and Clark [2009] offer a perspective on economic growth through a comparison of the cotton textile industries in India and Japan in the late nineteenth and early twentieth centuries. Textile mills in the two nations had comparable outputs as of 1890. In the ensuing fifty years, output per worker hour quintupled in Japan but did not increase much in India. These tren...

In this paper, we develop a tractable model of the labor market where workers search for jobs both while unemployed and while on the job. Search is directed in the sense that each worker chooses to search for the offer that provides the optimal tradeoff between the probability of obtaining the offer and the increase in the value relative to the worker’s current employment. There are both aggreg...

This work provides an explanation for the puzzling trade-off between labor productivity and capital accumulation, occurred in Italian energy sector from the late 1980s onwards. By using a vector autoregressive model, we decompose labor productivity into technological and non technological shocks. We find that: (1) labor productivity responds positively to technological shocks, leading to a tran...

I study asset prices in a two-agent production economy in which the worker has private information about her labor productivity. The shareholder offers an incentive compatible long-term labor contract, which partially insures the worker against labor income risk. I compare the model’s performance to settings with a competitive labor market, and with static labor contracts. My model successfully...

Poverty and altered planning horizons brought on by the HIV/AIDS epidemic can change individual discount rates, altering incentives to conserve natural resources. Using longitudinal household survey data from western Kenya, we estimate the effects of health status on investments in soil quality, as indicated by households' agricultural land fallowing decisions. We first show that this effect is...

We employ the World Bank Enterprise Survey (WBES) data collected from 2006-2011 for over 40,000 firms in 115 countries to study the effect of International Organization for Standardization (ISO) certification on firm performance measured by sales growth and labor productivity. Our results from both the univariate tests and multivariate regressions show that ISO-certified firms exhibit higher sa...

This paper analyzes the relationship between investment in information and communication technologies (ICT), non–ICT–investment, labor productivity and workplace reorganization. Firms are assumed to reorganize workplaces if the productivity gains arising from workplace reorganization exceed the associated reorganization costs. Two different types of organizational change are considered: introdu...

Using a newly constructed China Industrial Productivity (CIP) data set, this study adopts the Jorgensonian aggregate production possibility frontier (APPF) framework incorporating Domar weights to account for the industry origin of China’s aggregate growth for the period 1980-2010. We show that 7.14 percentage points of China’s gross domestic product (GDP) growth of 9.16% per annum can be attri...