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Adjusting to a New Technology: Experience and Training

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Author Info
Elhanan Helpman
Antonio Rangel

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Abstract

December 1998

How does the economy react to the arrival of a new major technology? The existing literature on General Purpose Technologies (GPTs) has studied the role that mechanisms like secondary innovations, diffusion, and learning by firms play in the adjustment process. By contrast, we focus on a new mechanisms based on the interplay between technological change and human capital accumulation. We show that technological change that requires more education and training, like computerization, necessarily produces an initial slowdown. Surprisingly, however, technological change that lowers the training requirement, like the move from the artisan shop to the factory, can produce either a bust or a boom. We identify three key properties that determine which effect will occur: (1) the productivity of inexperienced workers; (2) the speed with which experience increases productivity; and (3) the level of general skills required to operate the new technology.

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Paper provided by Stanford University, Department of Economics in its series Working Papers with number 99002.

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Date of creation: Dec 1998
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Handle: RePEc:wop:stanec:99002

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Philippe Aghion & Peter Howitt, 1998. "On the Macroeconomic Effects of Major Technological Change," Annales d'Economie et de Statistique, ADRES, issue 49-50, pages 03, Janvier-J. [Downloadable!]
  2. repec:fth:prinin:377 is not listed on IDEAS
  3. Andreas Hornstein & Per Krusell, 1996. "Can Technology Improvements Cause Productivity Slowdowns?," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 209-276 National Bureau of Economic Research, Inc. [Downloadable!]
  4. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February. [Downloadable!] (restricted)
  5. Elhanan Helpman & Manuel Trajtenberg, 1994. "A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies," NBER Working Papers 4854, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November. [Downloadable!] (restricted)
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  7. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-29, April. [Downloadable!] (restricted)
  8. Elhanan Helpman & Manuel Trajtenberg, 1996. "Diffusion of General Purpose Technologies," NBER Working Papers 5773, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Yong Jin Kim & Jong-Wha Lee, 1999. "Technological Change, Investment in Human Capital, and Economic Growth," CID Working Papers 29, Center for International Development at Harvard University. [Downloadable!]
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  2. Toshiya Ishikawa, 2004. "Technology Diffusion and Business Cycle Asymmetry," DEGIT Conference Papers c009_016, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  3. Disney, Richard F & Haskel, Jonathan & Heden, Ylva, 2000. "Restructuring And Productivity Growth In UK Manufacturing," CEPR Discussion Papers 2463, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Reis, Ana Balcao & Sequeira, Tiago Neves, 2004. "Human Capital Composition, R&D and the Increasing Role of Services," FEUNL Working Paper Series wp456, Universidade Nova de Lisboa, Faculdade de Economia. [Downloadable!]
    Other versions:
  5. Alberto Bucci, 2006. "Product Market Competition, R&D Effort and Economic Growth," DEGIT Conference Papers c011_037, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
    Other versions:
  6. Adriaan Van Zon & Roberto Antonietti, 2007. "Education and Training in a Model of Endogenous Growth with Creative Wear-and-Tear," "Marco Fanno" Working Papers 0057, Dipartimento di Scienze Economiche "Marco Fanno". [Downloadable!]
  7. Blázquez, Maite & Ramos, Jose, 2007. "Disparidades entre Educación Formal y Educación en el Puesto de Trabajo," Working Papers in Economic Theory 2007/10, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History). [Downloadable!]
  8. R. Antonietti, 2005. "The role of general and firm-specific training for new technology adoption and economic growth: a critical review," Working Papers 538, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  9. Arvind Virmani, 2005. "Policy regimes, growth and poverty in India : Lessons of government failure and entrepreneurial success," Indian Council for Research on International Economic Relations, New Delhi Working Papers 170, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
  10. Canton, E.J.F. & Groot, H.L.F. de & Nahuis, R., 1999. "Vested interest and resistance to technology adoption," Discussion Paper 106, Tilburg University, Center for Economic Research. [Downloadable!]
  11. Nahuis, R., 1998. "The dynamics of a general purpose technology in a research and assimilation model," Discussion Paper 119, Tilburg University, Center for Economic Research. [Downloadable!]
  12. Oleg Badunenko & Daniel J. Henderson & Valentin Zelenyuk, 2007. "Technological Change and Transition: Relative Contributions to Worldwide Growth during the 1990s," Discussion Papers of DIW Berlin 740, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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  13. Oleg Badunenko, 2007. "Downsizing in German Chemical Manufacturing Industry during the 1990s: Why Small Is Beautiful?," Discussion Papers of DIW Berlin 722, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  14. Zon,Adriaan ,van & Antonietti,Roberto, 2005. "Education and Training in a Model of Endogenous Growth with Creative Destruction," Research Memoranda 010, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
  15. Günther Rehme, 2004. "Redistribution and Economic Growth in Integrated Economics," Darmstadt Discussion Papers in Economics 141, Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology). [Downloadable!]
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  16. Sunde, Uwe, 2001. "Human Capital Accumulation, Education and Earnings Inequality," IZA Discussion Papers 310, Institute for the Study of Labor (IZA). [Downloadable!]
  17. Weinberg, Bruce A., 2004. "Experience and Technology Adoption," IZA Discussion Papers 1051, Institute for the Study of Labor (IZA). [Downloadable!]
  18. Patrick Francois & Joanne Roberts, 2000. "Contracting Productivity Growth," Working Papers jorob-99-02, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
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