Based on a 1999 study by Hall and Jones, assume that returns to education are as...

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Based on a 1999 study by Hall and Jones, assume that returns to education are as follows: 13.4% per year for the first four years of schooling; 10.1% per year for the next four years of schooling; and 6.8% per year for education beyond eight years. Now suppose we are comparing two countries, i and j. The two countries are similar in every respect except the education of their population. In country i, all adults have 12 years of schooling. In country j, all adults have 3 years of schooling. What is the ratio of output per worker in steady state in the two countries (ratio of country i to country j)? Based on a 1999 study by Hall and Jones, assume that returns to education are as follows: 13.4% per year for the first four years of schooling; 10.1% per year for the next four years of schooling; and 6.8% per year for education beyond eight years. Now suppose we are comparing two countries, i and j. The two countries are similar in every respect except the education of their population. In country i, all adults have 12 years of schooling. In country j, all adults have 3 years of schooling. What is the ratio of output per worker in steady state in the two countries (ratio of country i to country j)?

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To calculate the ratio of output per worker in steady state between country i and country j we need ... View the full answer