What Explains Schooling Di§erences Across Countries?


Abstract
This paper provides a theory that explains the cross-country distribution of average years ofschooling, as well as the so called human capital premium puzzle. In our theory, credit frictionsas well as di§erences in access to public education, fertility and mortality turn out to be thekey reasons why schooling di§ers across countries. Di§erences in growth rates and in wages aresecond order.