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Luddites and the Demographic Transition

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Author Info
Kevin H. O'Rourke, Ahmed S. Rahman and Alan M. Taylor

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Abstract

Technological change was unskilled-labor-biased during the early Industrial Revolution, but is skill-biased today. This is not embedded in extant unified growth models. We develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. Endowments dictate that the early Industrial Revolution be unskilled-labor-biased. Increasing basic knowledge causes a growth takeoff, an income-led demand for fewer educated children, and the transition to skill-biased technological change. The simulated model tracks British industrialization in the 18th and 19th centuries and generates a demographic transition without relying on either rising skill premia or exogenous educational supply shocks.

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Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp266.

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Date of creation: 07 Nov 2008
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Handle: RePEc:iis:dispap:iiisdp266

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  25. repec:bep:macadv:v:1:y:2001:i:advances/1/2:p:1028-1028 is not listed on IDEAS
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  1. Oded Galor, 2009. "2008 Lawrence R. Klein Lecture –Comparative Economic Development: Insights from Unified Growth Theory," Working Papers 2009-10, Brown University, Department of Economics. [Downloadable!]
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