Which of the following is the primary source of cross-country differences in the real earnings of workers?

Question

Quizplus · Accepted Answer

Differences in output per worker, also known as productivity, are the primary source of cross-country differences in the real earnings of workers. Countries with higher productivity can afford to pay higher wages to their workers, leading to higher real earnings. Natural resource endowments and access to modern technology can certainly contribute to productivity, but they are not the primary sources of cross-country differences. The average number of hours worked and the share of workers that are members of a labor union can affect the distribution of income within a country, but they do not necessarily determine the overall level of real earnings.

Which of the Following Is the Primary Source of Cross-Country