Technology frontier, labor productivity and economic growth: Evidence from OECD countries
AbstractWe use 29 OECD countries data spanning over 1960-2000 to study the growth strategy when countries are close to the technology frontier. Relying on a semi-parametric generalized additive model, we estimate labor productivity equations. We find that the number of agents enrolled in higher education is a determinant of growth. Moreover, when a country is sufficiently near the technology frontier thanks to an increasing R&D expenditure, it becomes optimal to invest in fundamental research, since after a short period of efficiency, business R&D can no longer ensure the transition toward the technology frontier, while higher education presents the opposite shape. These findings support the main assertion of Aghion and Cohen (2004) that countries which are near the technology frontier have to invest in higher education while those far away from the frontier make their technology level growing up by investing in primary and secondary schooling.
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Bibliographic InfoPaper provided by Center for Research in Economic Analysis, University of Luxembourg in its series CREA Discussion Paper Series with number 09-19.
Date of creation: 2009
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Other versions of this item:
- Azomahou, Theophile & Diene, Bity & Diene, Mbaye, 2009. "Technology frontier, labor productivity and economic growth: Evidence from OECD countries," UNU-MERIT Working Paper Series 059, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.
- I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-23 (All new papers)
- NEP-EFF-2010-01-23 (Efficiency & Productivity)
- NEP-INO-2010-01-23 (Innovation)
- NEP-LAB-2010-01-23 (Labour Economics)
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