From skills to occupations: comparative advantage and cross-country income differences
This paper develops a general equilibrium model where workers of different skill groups sort into occupations by comparative advantage.
Abstract
The authors revisit the role of human capital in cross-country income differences. They develop a general equilibrium model where workers of different skill groups sort into occupations by comparative advantage. Wages and employment depend on workers’ skill quality, occupation-specific country-embedded productivity, and occupational distortions. Using harmonized microdata for 50 countries, they infer these components from the model’s equilibrium conditions.
This work is part of the Structural Transformation and Economic Growth (STEG) programme.
Citation
Gottlieb C and others. ‘From skills to occupations: comparative advantage and cross-country income differences’ STEG Working Paper, 2025
Links
From skills to occupations: comparative advantage and cross-country income differences