Quality of Work Experience and Economic Development: Estimates Using Canadian Immigrant Data

Abstract

This paper presents a methodology to measure the contribution of human capital quality to economic development using immigrant data. We document the fact that immigrants from poor countries earn lower returns to schooling and work experience than immigrants from rich countries. We argue that this fact is most consistent with a model in which a country’s human capital quality depends on its level of income. Then we use results from regressions of immigrants’ earnings to estimate the contribution of human capital quality to economic development. An important finding is that work experience quality is more important than schooling quality for economic development.