We estimate the direct and external effects of levels of schooling on personal income in Ecuador in 2011, using data for 69,653 individuals in 567 municipalities. Using a Mincerian model that includes municipal levels of schooling and the size of the municipality and controls for endogeneity, we...

Development accounting depends on two simplifying assumptions, that economies can be represented by a common aggregate production function and that aggregate factors of production are paid their social marginal products. An aggregate production function can explain income across countries, but...