34 2016, we employed panel regressions to investigate how changes in the returns to experience over time correlated with several important factors. Returns to experience are positively correlated with economic development and are lower for individuals that experienced a recession in the initial years of their career. Economies that transitioned out of communism made past experience obsolete and thus exhibited lower returns to experience. Returns to experience had no correlation with initial stocks of experience or education. In particular, the latter two results suggest that experience may not have decreasing returns and may not be easily substituted by more education.

Third, our accounting framework showed that the contribution of experience to human capital and economic development is as important as the contribution of education itself. Indeed, the long run impact is similar whether developing countries achieve the returns to experience or attain the same distribution of education as developed economies. However, raising returns to experience has a faster impact.

Finally, returns to experience only greatly increase as economies become developed. This suggests that returns to experience might proxy for an economy’s ability to converge and catch up to high-income economies.

# **REFERENCES**

Arrow, Kenneth J., “The Economic Implications of Learning by Doing,” _The Review of Economic Studies_ , 1962, _29_ (3), 155–173.

Banerjee, Abhijit and Esther Duflo, “Growth Theory through the Lens of Development Economics,” in Philippe Aghion and Steven Durlauf, eds., _Handbook of Economic Growth_ , 1 ed., Vol. 1, Part A, Elsevier, 2005, chapter 07, pp. 473–552.

Becker, Gary, _Human capital._ , New York: Columbia University Press., 1964, 1975.

Ben-Porath, Yoram, “The Production of Human Capital and the Life Cycle of Earnings,” _Journal of Political Economy_ , 1967, _75_ , 352–352.

Bils, Mark and Peter J. Klenow, “Does Schooling Cause Growth?,” _American Economic Review_ , December 2000, _90_ (5), 1160–1183.

Card, David and Thomas Lemieux, “Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis,” _The Quarterly Journal of Economics_ , 2001, _116_ (2), 705–746.

Caselli, Francesco, “Accounting for Cross-Country Income Differences,” in Philippe Aghion and Steven Durlauf, eds., _Handbook of Economic Growth_ , Vol. 1 of _Handbook of Economic Growth_ , Elsevier, 2005, chapter 9, pp. 679–741.

and Antonio Ciccone, “The contribution of schooling in development accounting: Results from a nonparametric upper bound,” _Journal of Development Economics_ , 2013, _104_ , 199 – 211.

and , “The Human Capital Stock: A Generalized Approach: Comment,” _American Economic Review_ , March 2019, _109_ (3), 1155–74.

- , Jacopo Ponticelli, and Federico Rossi, “A New Dataset on Mincerian Returns,” in Francesco Caselli, ed., _Technology Differences over Space and Time_ , Princeton University Press, 2016.

, , and , _A New Data Set on Mincerian Returns Technology Differences across Space and Time_ , Princeton University Press, 2016. Dauth, Wolfgang, Sang Yoon Lee, Sebastian Findeisen, and Tommaso Porzio, “Labor Reallocation and Convergence: Evidence from East Germany,” Technical Report 2019.

- de Hoyos, Rafael, John Kennan, and Rebecca Lessem, “Returns to Investments in Human Capital, within and across Countries,” 2015. Mimeo.