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Caselli (2006), on the other hand, argues that quality differences are unlikely to
increase the contribution of human capital to aggregate productivity.
There is a large literature on returns to schooling. As noted in the text and also
in Chapter 3, this literature typically finds that one more year of schooling increases
earnings by about 6 to 10% (see, for example, the survey in Card, 1999).
There is also a large literature on capital-skill complementarity. The idea was
first put forward and empirically supported in Griliches (1969). Katz and Autor
(1999) summarize more recent evidence on as capital-skill complementarities.
Technological human capital externalities are emphasized in Jacobs (1965), Lucas (1988), Azariadis and Drazen (1990), while pecuniary human capital externalities were first discussed by Marshall (1961), who argued that increasing the geographic concentration of specialized inputs increases productivity since the matching
between factor inputs and industries is improved. Models of pecuniary human capital externalities are constructed in Acemoglu (1996, 1997). The model with capitalskill complementarity and labor market imperfections is based on Acemoglu (1996),
who provides a more detailed and microfounded model leading to similar results to
those presented in Section 10.6 and derives the results on pecuniary externalities
and human capital externalities.
The empirical literature on human capital externalities includes Rauch (1993),
Acemoglu and Angrist (2000), Duflo (2004), Moretti (2002) and Ciccone and Perri
(2006).
The role of human capital in adapting to change and implementing new technologies was first suggested by Schultz (1965) in the context of agricultural technologies
(he emphasized the role of ability rather than human capital and stressed the importance of “disequilibrium” situations). Nelson and Phelps (1966) formulated the
same ideas and presented a simple model, essentially identical to that presented in
Section 10.8 above. Foster and Rosenzweig (1995) provide evidence consistent with
this role of human capital. Benhabib and Spiegel (1994) and Aghion and Howitt
(1999) also include extensive discussions of the Nelson-Phelps view of human capital. Recent macroeconomic models that feature this role of human capital include
Galor and Tsiddon (1997), Greenwood and Yorukoglu (1997), Caselli (1999), Galor
and Moav (2001), and Aghion, Howitt and Violante (2004).
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