Estimating the returns to human capital in the cities of developing countries

The purpose of this project is to examine the relationship between returns to human capital, urbanisation, and growth, using a household survey and population census microdata to estimate the wage profiles for:

(i) The urban areas of various groups of countries.

(ii) The rural areas of the same countries.

(iii) The largest city and the secondary cities of the same countries.

Comparing the wage profiles of urban and rural areas, as well as between major cities and secondary cities, will allow us to determine whether reallocating people across locations could increase income. We will then use simple development account methods to discuss the contribution of urban-specific human capital to the variation in cross-country income differences.

Outputs

  • Publication - Policy Brief

    Returns to work are lower in developing countries: Is it due to their sectoral and urban structure?

    Developing economies have more workers in sectors or locations where there may be less scope for learning, thus, this brief asks whether their economic and urban structure could explain their lower levels of economic development? This study obtains measures of returns to work experience across various dimensions using data from 23 million individuals in more than...

    8 Jan 2020 | Remi Jedwab, Paul Romer, Dietrich Vollrath, Asif Islam, Daniel Pereira