Talent Utilization, a Source of Bias in Measuring TFP

摘要

This paper analyzes a model of economic growth that explains differences ineconomic structure across countries. It highlights the interplay betweenproductivity, talents utilization and entrepreneurship incentives. The paper hastwo main results. First, it argues that when measuring human capital we ignoreone dimension, which is ”talents utilization”. It is suggested then that, indevelopment accounting, human capital is inaccurately measured. Second, itshows that the magnitude of talents utilization increases with the level ofdevelopment. Thus, the paper suggests that talents utilization amplifiesdifferences in productivity and contributes to the explanation of large observedinternational differences in per capita income.