We have focused on the effect of nutrition on per capita income as well as for the contribution of nutrition in income differences among countries. In particular, whether accounting for nutritional differences will reduce the size of the unexplained residual variance currently attributed to differences in productivity among countries with different income levels. We have presented a variance decomposition methodology for the direct effect of nutrition on per-capita income besides introducing physical capital to human capital ratio in the production technology. Worker effort has a good explanatory power to analyze unexplained residuals. This is applicable for all samples and sub-samples except the low-income level countries.

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