Dimensions of human capital and technological diffusion

We examine the impact of a comprehensive set of measures of human capital on recently created, direct measures of technology adoption using country-level panel data for the period 1964–2003, covering a wide range of technologies in various sectors of the economy. We consider many dimensions of human capital, using both qualitative and quantitative measures, as well as indirect measures that capture the role of “learning by doing” intrinsic to the process of technological diffusion. Our analysis, which examines the human capital and technological diffusion link more comprehensively relative to previous studies, suggests that the link is a conditional one, resting on various aspects of human capital and the nature of the technology in question. Overall, the results suggest that the type of human capital that is formed via the learning-by-doing mechanism may be the most important determinant of technological diffusion, followed by, to a substantially less degree, qualitative determinants such as cognitive skills (measured using test scores) and quantitative or other measures (such as years of schooling and life expectancy). Our conclusions are robust to the inclusion of institutional variables and other factors that determine technological diffusion.