Information Technology, Education, and the Sources of Economic Growth across U.S. Industries

This paper generates new industry-level data to examine the sources of the U.S. economic resurgence after 1995. We employ a production possibility frontier to aggregate across industries and show that investment in information technology (IT), increases in the employment of non-college educated workers, and productivity gains account for the surge in output. A closer look at the underlying industry data shows enormous variation in patterns of input accumulation and productivity growth. We conclude that failure to account for this variation can create a misleading perception of the sources of economic growth.

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