Human Capital Composition, Growth and Development in an R&D Endogenous Growth Model
AbstractThe effect of human capital on growth and development has been somewhat neglected in economic literature. However, evidence has suggested the importance of engineering and technical skills to economic growth. Simultaneously, European Commission and OECD has presented data that reveal the shortage of these fields of science in developed countries. Using a standard increasing-variety endogenous growth model, we propose various measures of this composition, namely the ratio of high-tech to total human capital and the ratio of high to low-tech human capital. We show that allocation matters in what growth and development are concerned. We also show that the decentralized equilibrium leads to less investment in high-techs than does the social planner and the tendency to under-invest in R&D is expanded under the presence of human capital composition. When compared to data, the model does well in explaining the rate of growth and the level of development (less robustly) as a function of these measures.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0310015.
Length: 48 pages
Date of creation: 18 Oct 2003
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Human Capital Composition; Growth; Development; R&D;
Other versions of this item:
- Sequeira, Tiago Neves, 2003. "Human Capital Composition, Growth and Development in an R&D Endogenous Growth Model," FEUNL Working Paper Series wp434, Universidade Nova de Lisboa, Faculdade de Economia.
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-10-20 (All new papers)
- NEP-DEV-2003-10-20 (Development)
- NEP-DGE-2003-10-20 (Dynamic General Equilibrium)
- NEP-LAB-2003-10-20 (Labour Economics)
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