The human capital stock: A generalized approach: Reply

Human capital differences across countries can appear large or small depending on measurement methods. This Reply clarifies key assumptions and conceptual distinctions across accounting approaches. Accounting-based arguments for small human capital differences are difficult to sustain. By contrast, large human capital differences are theoretically and empirically coherent. Non-accounting arguments against large human capital variation are examined and their weaknesses pinpointed. This Reply also suggests a fruitful way forward for this literature, providing a natural conception of human capital that integrates literatures on ideas and institutions with the accounting of Jones (2014).