Macroeconomists acknowledge the contribution of human capital to economic growth,
but their empirical studies define human capital solely in terms of schooling. In
this paper, we extend production function models of economic growth to account for
two additional variables that microeconomists have identified as fundamental components
of human capital: work experience and health. Our main result is that good health
has a positive, sizable, and statistically significant effect on aggregate output.
We find little variation across countries in average work experience, thus differentials
in work experience account for little variation in rates of economic growth. Finally,
we find that the effects of average schooling on national output are consistent with
microeconomic estimates of the effects of individual schooling on earnings, suggesting
that education creates no discernible externalities.