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Trade, Human Capital Accumulation and Growth in an Underdeveloped Economy

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  • Saarenheimo, Tuomas
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    Abstract

    This paper seeks to contribute to our understanding of the dynamic effects of trade, especially from a developing country's point of view. A model is constructed, in which a continuum of goods is produced using labor and human capital in different proportions. It is then examined how opening up trade changes the developing country's production structure towards labor intensive production and lowers the wage on human capital relative to the wage on labor. This, in turn, lowers the rate of human capital accumulation in the developing country. However, because of a favorable change in the terms of trade, the rate of growth may still rise as compared to the autarky level. Copyright 1993 by The editors of the Scandinavian Journal of Economics.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

    Volume (Year): 95 (1993)
    Issue (Month): 4 (December)
    Pages: 535-57

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    Handle: RePEc:bla:scandj:v:95:y:1993:i:4:p:535-57

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    Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442

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    Cited by:
    1. Tate, Robert & Finlayson, Greg & MacWilliam, Leonard & Wiley, Miriam M. & Morgenroth, Edgar & FitzGerald, John, 2006. "Health," Book Chapters, in: Morgenroth, Edgar (ed.), Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013 Economic and Social Research Institute (ESRI).
    2. Edgar Morgenroth, 2003. "What should Policy Makers Learn from Recent Advances in Growth Theory and New Economic Geography?," Papers WP150, Economic and Social Research Institute (ESRI).
    3. Fahey, Tony & Scott, Susan & FitzGerald, John, 2006. "Sports and Arts," Book Chapters, in: Morgenroth, Edgar (ed.), Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013 Economic and Social Research Institute (ESRI).
    4. Morgenroth, Edgar & FitzGerald, John (ed.), 2006. "Ex-ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013," Research Series, Economic and Social Research Institute (ESRI), number PRS59.
    5. Osang, Thomas & Pereira, Alfredo, 1997. "Foreign growth and domestic performance in a small open economy," Journal of International Economics, Elsevier, vol. 43(3-4), pages 499-512, November.
    6. O'Connell, Philip J. & Russell, Helen & FitzGerald, John, 2006. "Human Resources," Book Chapters, in: Morgenroth, Edgar (ed.), Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013 Economic and Social Research Institute (ESRI).
    7. Fahey, Tony & Russell, Helen & FitzGerald, John, 2006. "Childcare," Book Chapters, in: Morgenroth, Edgar (ed.), Ex-Ante Evaluation of the Investment Priorities for the National Development Plan 2007-2013 Economic and Social Research Institute (ESRI).

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