Most real-world trade liberalizations decrease tariffs and increase quotas without completely abolishing them. We ask how decreases in tariffs and increases in quotas affect productivity in an economy with monopoly rights in the import-competing sector. We show that a reduction in a tariff can...

We ask for which part of the observed cross-country differences in the level of per-capita income monopoly rights can account. We answer this question in a calibrated growth model with capital. Monopoly rights in the capital-producing sector shield labor market insiders from the competition by...

Standard models of economic development typically ignore geography and transport. In this paper, we argue that we should model the transport sector, as it plays a quantitatively important role.\\ To understand what will determine the importance of the transport sector, consider the transport...

Standard growth accounting exercises find large cross--country differences in aggregate TFP. Here we ask whether specific sectors are driving these differences, and, if this is the case, which these problem sectors are. We argue that to answer these questions we need to consider four sectors. In...

It is well known that poor countries are much less productive in agriculture than in the rest of the economy, and that it is hard to account for these productivity gaps. In this paper, we study US states during 1980–2009. We find that there are large productivity gaps between agriculture...

It is well known that hours per working-age person in continental Europe have shown a rather different time series pattern than in the US. While in 1970, hours per working-age person were similar, they subsequently fell in continental Europe but did not show a clear trend in the US. Strikingly,...

We document for nine countries ranging from rich (Canada, U.S.) to poor (India, Indonesia) that average wages are higher in non–agriculture than in agriculture. We measure sectoral human capital and find that it accounts for the entire wage gap in the U.S. and most of the wage gaps...

We demonstrate the usefulness of our results by using them to shed light on the existing empirical evidence. In particular, we argue that the studies of Syverson (2004), Schmitz (2005), and Lagakos (2007) are examples of how differences in the market size affect productivity. Our results are...

A big question in development economics is why developing countries are so unproductive in agriculture. This question is hard to answer because of limited data. In this project, we explore what we can learn from agriculture in US states where we have rich data. Focusing on US states has the...

This paper assesses how structural transformation is affected by sectoral differences in labor-augmenting technological progress, capital intensity, and substitutability between capital and labor. We estimate CES production functions for agriculture, manufacturing, and services on postwar US...