Accumulation of Human Capital in LDCs in the Presence of Unemployment
This paper takes up an aggregative growth framework to study how human and physical capital evolve over time as households allocate their investment between the two assets. In the context of unemployment of educated labor, it develops a general equilibrium model of an economy with two sectors: a composite good sector and a schooling sector where output is subject to increasing returns to scale. A temporary equilibrium for this economy depends on the endowments of physical and human capital as well as on the output elasticity of returns to scale and the price elasticity of education. The dynamic evolution of this economy is explored in terms of the accumulation of the two types of capital. A rise in education subsidy increases the demand for education at the cost of investment in physical capital and could lead to inefficient substitution between skilled and unskilled workers in the long run. Copyright 1994 by The London School of Economics and Political Science.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 61 (1994)
Issue (Month): 243 (August)
|Contact details of provider:|| Postal: Houghton Street, London WC2A 2AE|
Phone: +44 (020) 7405 7686
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0427
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0013-0427|