Many technologies used by the Linguistic Data Consortiums (LDCs) are developed in the Organization for Economic Cooperation and Development (OECD) economies and are designed to make optimal use of the skills of these richer countries’ workforces. Differences in the supply of skills create a mismatch between the requirements of these technologies and the skills of LDC workers, and lead to low productivity in the LDCs. Even when all countries have equal access to new technologies, this technology-skill mismatch can lead to sizable differences in total factor productivity and output per worker. Acemoglu and Zilibotti provide evidence in favor of the cross-industry productivity patterns predicted by their model. They also show that technology-skill mismatch could account for a large fraction of the observed output per worker differences in the data.
