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An analysis of the demand for skill in a growing economy

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  • Beladi, Hamid
  • Marjit, Sugata
  • Weiher, Kenneth

Abstract

We construct a trade theoretic model of skill formation with skill as a produced intermediate input. Capital is required for production as well as for education which transforms unskilled labor into skilled. We use this model to reflect analytically on India's rising requirement of skilled manpower. We show that even if growth of capital and supply of skilled manpower match, relative stagnation of unskilled manufacturing sector will magnify the gap between growth in demand and supply of skill. This may happen, for example, if there is a vast pool of workforce who may not have even the basic education to qualify as "unskilled" and excessive capital flows into the skilled sector. Thus a country with lack of education at a very basic level will be forced to import skilled manpower from the rest of the world.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 28 (2011)
Issue (Month): 4 (July)
Pages: 1471-1474

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Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1471-1474

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Skill formation Growth Capital allocation;

References

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  9. Toru Kikuchi & Ngo Van Long, 2010. "A Simple Model of Service Offshoring with Time Zone Differences," CESifo Working Paper Series 2990, CESifo Group Munich.
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  13. Amador, João & Cabral, Sónia, 2008. "Vertical specialization across the world: a relative measure," MPRA Paper 9618, University Library of Munich, Germany.
  14. Chakrabarti, Avik, 2004. "Asymmetric adjustment costs in simple general equilibrium models," European Economic Review, Elsevier, vol. 48(1), pages 63-73, February.
  15. Gilbert, John & Oladi, Reza, 2009. "Capital specificity, imperfect labor mobility and growth in developing economies," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 113-122, January.
  16. Ronald W. Jones & Sugata Marjit, 2001. "The Role of International Fragmentation in the Development Process," American Economic Review, American Economic Association, vol. 91(2), pages 363-366, May.
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  19. Kar, Saibal & Marjit, Sugata, 2009. "Urban informal sector and poverty," International Review of Economics & Finance, Elsevier, vol. 18(4), pages 631-642, October.
  20. Hamid Beladi & Avik Chakrabarti & Sugata Marjit, 2010. "Skilled-Unskilled Wage Inequality And Urban Unemployment," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 997-1007, October.
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Cited by:
  1. Mandal, Biswajit & Mandal, Arindam, 2014. "A Note on How and Why Growth and Unemployment Go Hand in Hand in Developing Economies," MPRA Paper 56523, University Library of Munich, Germany.
  2. Mandal, Biswajit & Marjit, Sugata & Nakanishi, Noritsugu, 2013. "Time Zones, Factor Prices and Inflow of Educational Capital: Changing Sectoral Composition," MPRA Paper 50883, University Library of Munich, Germany.

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