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An analysis of the demand for skill in a growing economy

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  • Beladi, Hamid
  • Marjit, Sugata
  • Weiher, Kenneth

Abstract

We construct a trade theoretic model of skill formation with skill as a produced intermediate input. Capital is required for production as well as for education which transforms unskilled labor into skilled. We use this model to reflect analytically on India's rising requirement of skilled manpower. We show that even if growth of capital and supply of skilled manpower match, relative stagnation of unskilled manufacturing sector will magnify the gap between growth in demand and supply of skill. This may happen, for example, if there is a vast pool of workforce who may not have even the basic education to qualify as "unskilled" and excessive capital flows into the skilled sector. Thus a country with lack of education at a very basic level will be forced to import skilled manpower from the rest of the world.

Suggested Citation

  • Beladi, Hamid & Marjit, Sugata & Weiher, Kenneth, 2011. "An analysis of the demand for skill in a growing economy," Economic Modelling, Elsevier, vol. 28(4), pages 1471-1474, July.
  • Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1471-1474
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Sugata Marjit & Biswajit Mandal, 2017. "Virtual trade between separated time zones and growth," International Journal of Economic Theory, The International Society for Economic Theory, vol. 13(2), pages 171-183, June.
    2. Biswajit Mandal & Arindam Mandal, 2015. "A Note on How and Why Growth and Unemployment Go Hand in Hand in Developing Economies," International Economic Journal, Taylor & Francis Journals, vol. 29(4), pages 681-693, December.
    3. Mandal, Biswajit & Marjit, Sugata & Nakanishi, Noritsugu, 2013. "Time Zones, Factor Prices and Inflow of Educational Capital: Changing Sectoral Composition," MPRA Paper 50883, University Library of Munich, Germany.
    4. Mandal, Biswajit & Marjit, Sugata & Nakanishi, Noritsugu, 2015. "Outsourcing, Factor Prices and Skill Formation in Countries with Non-overlapping Time Zones," MPRA Paper 68227, University Library of Munich, Germany.

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