This paper proposes a methodology to estimate externalities in human capital as a response to the evidence of a worldwide divergent development. We estimate supply and demand for human capital in a five-year panel for 60 countries in the period 1980-2000, and found that there are positive...

I study the interactions between the distribution of human capital, technological choice, and redistributive institutions. I first ask what makes alternative social contracts such as a European-style "welfare state" and US-style "laissez-faire" sustainable, and in particular how each is affected...