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Skill-Structure Shocks, the Share of the High-Tech Sector and Economic Growth Dynamics

Author

Listed:
  • Pedro Mazeda Gil

    (Faculdade de Economia, Universidade do Porto)

  • Oscar Afonso

    (Faculdade de Economia, Universidade do Porto)

  • Paulo B. Vasconcelos

    (Faculdade de Economia, Universidade do Porto)

Abstract

By means of an endogenous growth model of directed technical change with vertical and horizontal R&D, we study a transitional-dynamics mechanism that is consistent with the changes in the share of the high- versus the low-tech sectors found in recent European data. Under the hypothesis of a positive shock in the proportion of high-skilled labour, the technological-knowledge bias channel leads to nonbalanced sectoral growth with a noticeable shift of resources across sectors. A simple calibration exercise suggests that, under prevailing market-scale effects, the model is able to account for up to 50 to 100 percent of the increase in the share of the high-tech sector observed in the data from 1995 to 2007. However, the model predicts that the dynamics of the share of the high-tech sector has no significant impact on the economic growth rate.

Suggested Citation

  • Pedro Mazeda Gil & Oscar Afonso & Paulo B. Vasconcelos, 2015. "Skill-Structure Shocks, the Share of the High-Tech Sector and Economic Growth Dynamics," FEP Working Papers 554, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:554
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    More about this item

    Keywords

    industry dynamics; high tech; low tech; directed technical change; economic growth;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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