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Strategic complementarities between innovative firms and skilled workers: The poverty trap and the policymaker's intervention

  • Accinelli, Elvio
  • Sanchez Carrera, Edgar J.

Abstract The economy under study is populated by two types of firms (innovative and not) and two types of workers (skilled and unskilled). The aim is to develop a model that confirms the existence of complementarities between innovative firms (R&D activities) and skilled workers (human capital) and traces corresponding optimal dynamics. Workers follow an imitative behavior to choose their action type (skilled or unskilled). As the share of innovative firms is large enough, then the share of skilled workers in equilibrium depends on the reviewing rate (of imitation) for those unskilled workers. The policy maker intervention is justified only for a certain time by reducing the threshold to reach the high-level equilibrium, but once the economy is in a path for a high-level equilibrium such an intervention may stop.

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Article provided by Elsevier in its journal Structural Change and Economic Dynamics.

Volume (Year): 22 (2011)
Issue (Month): 1 (February)
Pages: 30-40

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Handle: RePEc:eee:streco:v:22:y:2011:i:1:p:30-40
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/525148

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  1. Van Reenen, John & Caroli, Eve, 2001. "Skill-Biased Organizational Change? Evidence from a panel of British and French establishments," Economics Papers from University Paris Dauphine 123456789/10093, Paris Dauphine University.
  2. Guellec, Dominique & Greenan, Nathalie & Caroli, Eve, 2001. "Organizational Change and Skill Accumulation," Economics Papers from University Paris Dauphine 123456789/10092, Paris Dauphine University.
  3. Oded Galor & Omer Moav, 2000. "Ability-Biased Technological Transition, Wage Inequality, And Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 469-497, May.
  4. Julian R. Betts, 1997. "The Skill Bias Of Technological Change In Canadian Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 146-150, February.
  5. Elvio Accinelli & Silvia London & Lionello F. Punzo & Edgar J. Sanchez Carrera, 2010. "Dynamic Complementarities, Efficiency and Nash Equilibria for Populations of Firms and Workers," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(1), pages 90-110.
  6. Michael T. Kiley, 1997. "The supply of skilled labor and skill-based technological progress," Finance and Economics Discussion Series 1997-45, Board of Governors of the Federal Reserve System (U.S.).
  7. Schlag, Karl H., 1999. "Which one should I imitate?," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 493-522, May.
  8. Daron Acemoglu, 2000. "Technical Change, Inequality, and the Labor Market," NBER Working Papers 7800, National Bureau of Economic Research, Inc.
  9. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change And Wage Inequality," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1055-1089, November.
  10. Hornstein, Andreas & Krusell, Per & Violante, Giovanni L, 2005. "The Effects of Technical Change on Labour Market Inequalities," CEPR Discussion Papers 5025, C.E.P.R. Discussion Papers.
  11. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
  12. Ulrich Kaiser, 2000. "New Technologies And The Demand For Heterogeneous Labor: Firm-Level Evidence For The German Business-Related Service Sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(5), pages 465-486.
  13. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," NBER Working Papers 5956, National Bureau of Economic Research, Inc.
  14. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
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