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Growth And Wage Inequality In A Scale-Independent Model With R&D And Human-Capital Accumulation

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  • OSCAR AFONSO
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    Abstract

    We present a dynamic, non-scale general equilibrium model with two human-capital types where Schumpeterian R&D and human-capital accumulation are the engines of growth and wage inequality. In particular, wage inequality is encouraged by relative changes in supply and demand of both human-capital types. Relative supply restricts employed human-capital levels. Relative demand is instantly affected by a new general-purpose technology and, as in the skill-biased technological change literature, by technological-knowledge bias. By considering substitutability between technologies and complementarity between inputs, the bias is driven by the price channel (not by the market-size channel) and is affected by human-capital accumulation. Copyright � 2010 The Author. Journal compilation � 2010 Blackwell Publishing Ltd and The University of Manchester.

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    Bibliographic Info

    Article provided by University of Manchester in its journal The Manchester School.

    Volume (Year): 78 (2010)
    Issue (Month): 2 (03)
    Pages: 149-182

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    Handle: RePEc:bla:manchs:v:78:y:2010:i:2:p:149-182

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