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Technological Progress, Mobility, and Economic Growth

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  • Galor, Oded
  • Tsiddon, Daniel

Abstract

This paper analyzes the relationship between technological progress, wage inequality, intergenerational earnings mobility, and economic growth. In periods of major technological inventions, a decline in the relative importance of initial conditions raises inequality, enhances mobility, and generates a larger concentration of high-ability individuals in technologically advanced sectors, stimulating future technological progress and growth. However, once technologies become more accessible, mobility is diminished and inequality decreases but becomes more persistent. The reduction in the concentration of ability in technologically advanced sectors diminishes the likelihood of technological breakthroughs and slows future growth. User friendliness, therefore, becomes unfriendly to future economic growth. Copyright 1997 by American Economic Association.

Suggested Citation

  • Galor, Oded & Tsiddon, Daniel, 1997. "Technological Progress, Mobility, and Economic Growth," American Economic Review, American Economic Association, vol. 87(3), pages 363-382, June.
  • Handle: RePEc:aea:aecrev:v:87:y:1997:i:3:p:363-82
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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