@booklet {61481, title = {The World Technology Frontier}, year = {2000}, note = {Download PDF}, month = {Oct 1, 2000}, abstract = {We define a country{\textquoteright}s technology as a triple of eficiencies: one for unskilled labor, one for skilled labor, and one for capital. We find a negative cross{\textendash}country correlation between the eficiency of unskilled labor and the eficiencies of skilled labor and capital. We interpret this finding as evidence of the existence of a World Technology Frontier. On this frontier, increases in the eficiency of unskilled labor are obtained at the cost of declines in the eficiency of skilled labor and capital. We estimate a model in which firms in each country optimally choose from a menu of technologies, i.e. they choose their technology subject to a Technology Frontier. The optimal choice of technology depends on the country{\textquoteright}s endowment of skilled and unskilled labor, so that the model is one of appropriate technology. The estimation allows for country{\textendash}specific technology frontiers, due to barriers to technology adoption. We find that poor countries tend disproportionately to be inside the World Technology Frontier.}, author = {Caselli, Francesco and John Coleman} }