Labor Quality and the Wealth of Nations
By Arnold Kling
Gregory Clark, an economics professor at the University of California, Davis, identifies the quality of labor as the fundamental factor behind economic growth. Poor labor quality discourages capital from flowing into a country, which means that poverty persists. Good institutions never have a chance to develop.
Read the whole article, then read Clark’s book (some of it is on line here).
I have not yet read the book, and I am eager to do so. Meanwhile, lots of questions come to mind. How to measure labor quality? How to sort out cause and effect? Above all, I wonder how to reconcile Clark’s views with those of William Lewis (The Power of Productivity), who says that you can take an unskilled man from Latin America and turn him into a highly productive construction worker simply by moving him to the United States and putting him to work under American management practices.