The Allocation of Talent and U.S. Economic Growth

By Chang-tai Hsieh, Erik Hurst, Charles I. Jones, Pete Klenow. Social Science Research Network, 2019

246 citations recorded by the source corpus.

In 1960, 94 percent of doctors and lawyers were white men. By 2010, the fraction was just 62 percent. Similar changes in other highly‐skilled occupations have occurred throughout the U.S. economy during the last 50 years. Given that the innate talent for these professions is unlikely to have changed differently across groups, the change in the occupational distribution since 1960 suggests that a substantial pool of innately talented women and black men in 1960 were not pursuing their comparative advantage. We examine the effect on aggregate productivity of the convergence in the occupational distribution between 1960 and 2010 through the prism of a Roy model. Across our various specifications, between 20% and 40% of growth in aggregate market output per person can be explained by the improved allocation of talent.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/8fc8b048449775bdb4d08894dca22cbb89fb2bd8

Citations in the corpus

• Life Cycle Wage Growth across Countries (2017, unknown): “income differences, in the spirit of Hsieh et al. (2013).”
• The Rise of American Ingenuity: Innovation and Inventors of the Golden Age (2017, unknown): “…role of cities, the distribution of talent, and the relationship between inequality, social mobility, innovation and growth (e.g., Klette and Kortum (2004), Akcigit and Kerr (2016), Acemoglu et al. (2015), Hsieh and Moretti (2015), Hsieh et al. (2013), Jones and Kim (2014), Aghion et al. (2015a)).”
• Children and the Remaining Gender Gaps in the Labor Market (2020, unknown): “Beyond concerns of rights and fairness, the continued underrepresentation of women in the labor market and gender pay gaps (especially among equally skilled men and women) is costly to society from an economic efficiency perspective (Hsieh et al., 2019).”