Author(s)  
Juan Carlos Cordoba, Marla Ripoll

This paper provides a theory that explains the cross-country distribution of average years of schooling, as well as the so called human capital premium puzzle. In our theory, credit frictions as well as differences in access to public education, fertility and mortality turn out to be the key reasons why schooling differs across countries. Differences in growth rates and in wages are second order.

JEL Codes  
I22: Educational Finance
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
O11: Macroeconomic Analyses of Economic Development
Keywords  
human capital
per capita income differences
life expectancy
public education spending
life-cycle model