This paper examines the Benhabib and Spiegel (2005) model of technology diffusion using a new latent index of human capital and competing indicators that include the Barro and Lee (2010) estimates. The new index is a measure of education quality for seventy nations in 1970-2003. Analysis utilises both cross-section and dynamic panel
GMM estimation and extends beyond the Cobb-Douglas production technology. The new evidence indicates that (i) the new index is most consistent with the model; (ii)
the skills-education gap has widened in Africa and advanced OECD countries, and (iii) capital-skill complementarities and skill-biased-technical-change have become global phenomena.