Differences in the Workforce across Countries

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The United States, India, and Niger differ in many ways. One is simply the number of people in each country. The workforce in the United States is about 150 million people. The workforce in India is more than three times greater—about 478 million in 2010—while the workforce in Niger is only about 5 million people. Thus India has much more labor to put into its production function than does Niger.

In Table 6.2 "Real GDP in 2003 in the United States, India, and Niger if All Three Countries Had the Same Workforce" we look at what would happen to output in India and Niger if— counterfactually—each had a workforce the size of that in the United States while their other inputs were unchanged. Output in the United States is, of course, unchanged in this experiment. India’s output would decrease to about $1.4 trillion because they would have a smaller workforce. Niger’s output would increase about tenfold to $88 trillion. Differences in the workforce obviously matter but do not explain all or even most of the variation across the three countries. Niger’s output would still be less than 1 percent of output in the United States.

Table 6.2 Real GDP in 2003 in the United States, India, and Niger if All Three Countries Had the Same Workforce