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4 Suppose that we are comparing two countries, i and j, that are sim

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4. Suppose that we are comparing two countries, i and j,
that are similar in every respect except the education of
their population. In country i, all adults have 10 years of
schooling. In country j, all adults have 4 years of
schooling. Calculate the ratio of output per worker in
steady state in the two countries. Use the relevant data on
wage from the table in problem 3.
Solution
here the country i is having higher productive capacity than
country j.
the output per worker in country i is= 2.77X6.77=18.7529%
output per worker in country j is=1.65X0.8= 1.32%

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4. Suppose that we are comparing two countries, i and j, that are similar in every respect except the education of their population. In country i, all adults have 10 years of schooling. In country j, all adults have 4 years of schooling. Calculate the ratio of output per worker in steady state in th ...
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