The Latest Batch from the NBER
Convergence at a 2% rate implies that it takes 35 years for half of an initial gap to vanish and 115 years for 90% to disappear. Convergence-rate parameters are important to pin down because they provide guidance on how fast countries like China and India are likely to catch up to richer countries.
…The results implied–in accordance with the data– that the U.S. South would not get close in per capita income to the rest of the country for about a century. Applying these results to East versus West Germany suggested that a short time frame for convergence was not a realistic expectation.3 And, looking forward to the potential reunification of North and South Korea, the iron law presents a pessimistic outlook on how rapidly the large gap in per capita product could be eliminated
One conclusion of this paper is that open borders could yield huge welfare gains: more than $10,000 a year for a randomly selected worker from a less-developed country (including nonmigrants). Another is that these gains are associated with a relatively small reduction in the real wage in developed countries, and even this effect disappears as the capital-labor ratio adjusts over time; indeed if immigration restrictions are relaxed gradually, allowing time for investment in physical capital to keep pace, there is no implied reduction in real wages.
Of course, if robots are taking over, all bets are off.
Bosses vary greatly in productivity. The difference between the best bosses and worst bosses is significant. Bosses in the top decile increase each worker’s output by about 1.3 units per hour more than bosses in the bottom decile. Given that the typical boss supervises about nine workers and the average worker produces about 10.3 units per hour, this amounts to a change in total productivity that is larger than the amount produced by the average worker.
…The boss’s primary job is teaching skills that persist. Contemporaneous motivation of workers is secondary.