IDEAS home Printed from https://ideas.repec.org/a/taf/ecinnt/v17y2008i6p571-592.html
   My bibliography  Save this article

Endogenous Human Capital Investment And The Interaction Of Frontier And Adoptive Knowledge On Growth And Wage Inequality

Author

Listed:
  • Kevin James Bowman

Abstract

A three-sector, overlapping-generations growth model endogenizes the opportunity cost of human capital formation and the relative skill requirements of invention, innovation, and adoption of general-purpose technologies. As a result, the relative wage of skilled workers is a function of the endogenous ratio of total-to-adoptive knowledge (where the difference in knowledge stocks is frontier knowledge). Comparative statics are examined for the model's seven parameters. Simulations (representing a transition with phases to a more complex level of economic development) are presented for simultaneous exogenous shocks capable of matching (i) observed inverse movements of the relative wage and the detrended relative supply in the USA, (ii) the sharp slowing and recovering US multifactor productivity growth data since the 1970s, and (iii) a reconciliation of data used to support or deny skill-biased technological change as a major force driving up the relative wage since 1980.

Suggested Citation

  • Kevin James Bowman, 2008. "Endogenous Human Capital Investment And The Interaction Of Frontier And Adoptive Knowledge On Growth And Wage Inequality," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(6), pages 571-592.
    • Handle: RePEc:taf:ecinnt:v:17:y:2008:i:6:p:571-592
    DOI: 10.1080/10438590701552045
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/10438590701552045
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10438590701552045?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    2. Claudia Goldin, 1999. "Egalitarianism and the Returns to Education during the Great Transformation of American Education," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 65-94, December.
    3. Theo S. Eicher, 1996. "Interaction Between Endogenous Human Capital and Technological Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(1), pages 127-144.
    4. Oded Galor & Omer Moav, 2000. "Ability-Biased Technological Transition, Wage Inequality, and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 469-497.
    5. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    6. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
    7. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    8. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(1), pages 35-52.
    9. Daron Acemoglu, 2002. "Directed Technical Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 781-809.
    10. repec:dau:papers:123456789/10091 is not listed on IDEAS
    11. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    12. Philippe Aghion, 2002. "Schumpeterian Growth Theory and the Dynamics of Income Inequality," Econometrica, Econometric Society, vol. 70(3), pages 855-882, May.
    13. Ram, Rati, 1990. "Educational Expansion and Schooling Inequality: International Evidence and Some Implications," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 266-274, May.
    14. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    15. Caroline M. Hoxby, 1997. "How the Changing Market Structure of U.S. Higher Education Explains College Tuition," NBER Working Papers 6323, National Bureau of Economic Research, Inc.
    16. Walde, Klaus, 2000. "Egalitarian and elitist education systems as the basis for international differences in wage inequality," European Journal of Political Economy, Elsevier, vol. 16(3), pages 445-468, September.
    17. Bowman, Kevin James, 2007. "Knowledge stocks by distance to frontier: Linking low education inequality to high growth in developing countries," Journal of Asian Economics, Elsevier, vol. 18(4), pages 613-635, August.
    18. Perotti, Roberto, 1996. "Growth, Income Distribution, and Democracy: What the Data Say," Journal of Economic Growth, Springer, vol. 1(2), pages 149-187, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bowman, Kevin James, 2007. "Knowledge stocks by distance to frontier: Linking low education inequality to high growth in developing countries," Journal of Asian Economics, Elsevier, vol. 18(4), pages 613-635, August.
    2. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    3. Benabou, Roland, 2005. "Inequality, Technology and the Social Contract," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 25, pages 1595-1638, Elsevier.
    4. Bourguignon, Francois, 2005. "The Effect of Economic Growth on Social Structures," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 27, pages 1701-1747, Elsevier.
    5. Theodore Koutmeridis, 2013. "The Market for "Rough Diamonds": Information, Finance and Wage Inequality," CDMA Working Paper Series 201307, Centre for Dynamic Macroeconomic Analysis, revised 14 Oct 2013.
    6. Ricardo Fort, 2007. "Land inequality and economic growth: a dynamic panel data approach," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 159-165, September.
    7. João Gabriel Fidalgo & Marta Simões & Adelaide Duarte, 2010. "Mind the Gap: Education Inequality at the Regional Level in Portugal, 1986-2005," Notas Económicas, Faculty of Economics, University of Coimbra, issue 32, pages 22-43, December.
    8. Churchill, Sefa Awawoyi & Yew, Siew Ling & Ugur, Mehmet, 2015. "Effects of government education and health expenditures on economic growth: a meta-analysis," Greenwich Papers in Political Economy 14072, University of Greenwich, Greenwich Political Economy Research Centre.
    9. Roman Arjona & Maxime Ladaique & Mark Pearson, 2001. "Growth, Inequality and Social Protection," OECD Labour Market and Social Policy Occasional Papers 51, OECD Publishing.
    10. Amparo Castelló-Climent, 2010. "Channels through Which Human Capital Inequality Influences Economic Growth," Journal of Human Capital, University of Chicago Press, vol. 4(4), pages 394-450.
    11. Amparo Castello & Rafael Domenech, 2002. "Human Capital Inequality and Economic Growth: Some New Evidence," Economic Journal, Royal Economic Society, vol. 112(478), pages 187-200, March.
    12. Artige, Lionel & Cavenaile, Laurent, 2023. "Public education expenditures, growth and income inequality," Journal of Economic Theory, Elsevier, vol. 209(C).
    13. Günther Rehme, 2007. "Education, Economic Growth and Measured Income Inequality," Economica, London School of Economics and Political Science, vol. 74(295), pages 493-514, August.
    14. Castelló-Climent, Amparo & Hidalgo-Cabrillana, Ana, 2012. "The role of educational quality and quantity in the process of economic development," Economics of Education Review, Elsevier, vol. 31(4), pages 391-409.
    15. Chanda, Areendam, 2008. "The rise in returns to education and the decline in household savings," Journal of Economic Dynamics and Control, Elsevier, vol. 32(2), pages 436-469, February.
    16. Daniele Checchi, 2001. "Education, Inequality and Income Inequality," STICERD - Distributional Analysis Research Programme Papers 52, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    17. Amparo Castelló-Climent, 2004. "A Reassessment Of The Relationship Between Inequality And Growth: What Human Capital Inequality Data Say?," Working Papers. Serie EC 2004-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    18. Petra Sauer & Martin Zagler, 2014. "(In)equality in Education and Economic Development," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S2), pages 353-379, November.
    19. Ozan Hatipoglu, 2007. "Inequality and Growth. Where Are We Headed? A Survey," Working Papers 2007/07, Bogazici University, Department of Economics.
    20. Andrés Rodríguez-Pose & Vassilis Tselios, 2010. "Inequalities in income and education and regional economic growth in western Europe," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(2), pages 349-375, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ecinnt:v:17:y:2008:i:6:p:571-592. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/GEIN20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.