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Luddites and the Demographic Transition

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Author Info
Kevin H. O'Rourke
Ahmed S. Rahman
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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14484.

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Date of creation: Nov 2008
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Handle: RePEc:nbr:nberwo:14484

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Find related papers by JEL classification:
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
N10 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - General, International, or Comparative
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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Cited by:
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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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