Technological Progress, Mobility, and Economic Growth
AbstractThis paper analyses the relationship between technological progress, intergenerational earnings mobility, and economic growth. The analysis demonstrates that the interplay between technological progress and two components that determine individual earnings – parental human capital and individual ability – governs mobility, technological progress, and economic growth. In periods of major technological inventions the ability effect is the dominating factor. The decline in the relative importance of initial parental conditions (i.e. the driving force behind the persistence of inequality) enhances mobility and generates a larger concentration of high-ability individuals in technologically-advanced sectors, stimulating further technological progress and economic growth. Once existing technologies become more accessible, however, mobility is diminished and inequality becomes more persistent. The reduction in the concentration of human capital in technologically-advanced sectors diminishes the likelihood of major technological breakthroughs and slows down future economic growth. User friendliness, therefore, becomes unfriendly to future economic growth.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1413.
Date of creation: Jun 1996
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Other versions of this item:
- Galor, Oded & Tsiddon, Daniel, 1997. "Technological Progress, Mobility, and Economic Growth," American Economic Review, American Economic Association, vol. 87(3), pages 363-82, June.
- Galor, O. & Tsiddon, D., 1996. "Technological Progress, Mobility and Economic Growth," Papers 13-96, Tel Aviv.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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