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Knowledge obsolescence, human capital inequality, and growth: A network perspective in an automated knowledge society

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  • Hohn, Philipp Tobias
  • Klarl, Torben

Abstract

This paper suggests a micro-founded theory of human capital accumulation that is embedded in an endogenous growth model in which rational and cognitively constrained agents allocate time between production and networking activities within a knowledge-diffusion structure. The framework includes three important mechanisms: (i) learning in a knowledge network; (ii) possible skill downgrading due to knowledge obsolescence; and (iii) fear of technological unemployment due to automation. The analysis distinguishes between fully rational agents and cognitively constrained agents, demonstrating that limited cognitive capacity impedes optimal networking behavior and amplifies human capital inequality. Numerical simulations and comparative dynamics further indicate that higher rates of knowledge obsolescence slow human capital accumulation, weaken growth, and disproportionately burden cognitively constrained individuals, potentially trapping the economy in a low-skill, stagnant equilibrium.

Suggested Citation

  • Hohn, Philipp Tobias & Klarl, Torben, 2026. "Knowledge obsolescence, human capital inequality, and growth: A network perspective in an automated knowledge society," Economic Modelling, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:ecmode:v:155:y:2026:i:c:s0264999325004110
    DOI: 10.1016/j.econmod.2025.107416
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    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

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