Trenczek, Jan; Wacker, Konstantin - 2023 - This version: September 28, 2023
Misallocation of human capital across sectors can have substantial negative implications for aggregate output. So far … individual inputs. Our estimates from sectoral data of 39 countries suggest that physical and human capital are less … substitutable than Cobb-Douglas assumes. Our counterfactual results indicate that human capital misallocation can explain …