One of the most important challenges in economic sciences is to explain the observed large differences in the wealth of nations. Although, total factor productivity is at the core of income inequality across countries. One of the main difficulties is that there are no measures of quality of education and productivity across countries. To assess the sources of cross-country income inequality, economists need to assume away cross-country differences in the quality of schooling and to measure productivity as a residual. It would be unfeasible to do a standard variance decomposition analysis as economic theory implies that quality of education and total factor productivity are likely to be jointly determined. Moreover, without a tight measurement of human capital and its effects on the economy, no sound analyses can be carried out of the impact of public educational policies. The proposal aims too, to develop a structural model of human capital investments decisions and use this model for two socio-economic studies: 1. International quantitative assessment of total factor productivity and human capital in accounting for the per capita income inequalities observed; 2. Quantitative cross-country investigation of public policies on the distribution of education and income, and intergenerational mobility The project proposes to use the new theoretical framework to evaluate the aggregate and distributive effects of some recent proposals for reforming taxation and education institutions in O.E.C.D. countries. The research will make easier to understand the poverty of the nations and provide European policy makers with valuable insights for reducing the extent of poverty. This proposal will help the researcher, Andrés Erosa, to reintegrate among the European academics and will provide a clear input to the European research area. Andres Erosa is eager to be one of the leading researchers of the IMDEA Social Sciences and to become a reference among European academics.