Monday, March 31, 2008

More on the US's Productivity-Growth Slowdown.

I had been looking at some education data, when just by chance, Clive Crook led me to new study, The Accelerating Decline in America's High-Skilled Workforce: Implications for Immigration Policy, by Jacob Kirkegaard of the Peterson Institute for International Economics. Pretty graph, which I re-reproduce here.

Source [pdf]

Loose thoughts:

  1. Since the quality of (tertiary) education varies from country to country, static comparisons across countries might not be altogether that revealing.

  2. And this graph does not reveal by itself when differences are statistically significant, so perhaps some within-country comparisons are not what they seem to be.

  3. But having said that, within-country, unless you get (from top to bottom) a triangle, followed by a little black square, a black dot, and then a big, gray square, that country is likely headed for a productivity growth slowdown, conditional on education quality within that country and a level of impact of human capital on productivity. (34 years old is old enough to rule out the "they just take longer to get a college degree there" argument.) Germany seems particularly troublesome, although their restricted university/ widespread on-the-job training system of higher education might explain some of this inversion in a more optimistic way.

  4. Within-country and given that desirable order of symbols, a greater spread suggests good prospects of human-capital driven growth. Korea, in particular, might be a happening place to watch.

  5. Is the US headed for productivity-growth stagnation? (See here and here.) So let those H1B visas flow like rivers of honey! (And I'm being selfless here: having one already, restrictions are what's in my narrow, myopic self-interest.)

  6. Peruvians have reasons to feel within-country hopeful.


Troy Camplin said...

Productivity is not necessarily tied to tertiary education, though. For example, if you are a country that needs factory workers, a secondary (or even primary) education may be all you need. It does concern me that the U.S. has stopped providing an education for anyone not going to college -- which may explain the 12 million students who drop out of high school annually.

ram said...


Thanks for your comment. It is very true. If I felt the compulsive need to "defend" myself, I'd say that I *was* talking about the kind of productivity nad countries) that requires workers with tertiary education, but nah: you unquestionably make an excellent point.