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We thank colleagues at the University of Michigan for developing the Health and Retirement Survey. We also are grateful to the National Institute of Aging, the Center for the Demography of Health and Aging at UW-Madison, and the Russell Sage Foundation for financial support, Sheng-Kai Chang for sharing code that assisted in the earnings estimation, and to numerous colleagues at Wisconsin and elsewhere and to seminar participants for helpful comments. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic Research.

We reevaluate the role of human capital in determining the wealth of nations. We use standard human capital theory to estimate stocks of human capital and allow the quality of human capital to vary across countries. Our model can explain differences in schooling and earnings profiles and, consequently, estimates of Mincerian rates of return across countries. We find that effective human capital per worker varies substantially across countries. Cross-country differences in Total Factor Productivity (TFP) are significantly smaller than found in previous studies. Our model implies that output per worker is highly responsive to changes in TFP and demographic variables.

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What caused the baby boom? And can it be explained within the context of the secular decline in fertility that has occurred over the last 200 years? The hypothesis is that:(a) The secular decline in fertility is due to the relentless rise in real wages that increased the opportunity cost of having children;(b) The baby boom is explained by an atypical burst of technological progress in the household sector that occurred in the middle of the last century. This lowered the cost of having children.A model is developed in an attempt to account, quantitatively, for both the baby boom and bust.