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Human Capital Distribution, Technological Progress, and Economic Growth

Author

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  • Galor, Oded
  • Tsiddon, Daniel

Abstract

This paper analyses the interaction between the distribution of human capital, technological progress, and economic growth. It demonstrates the significant role of the distribution of human capital in the process of economic development. The evolutionary pattern of the human capital distribution, the income distribution and economic growth are determined by the interplay between a local home environment externality and a global technological externality. In periods during which the home environment externality is the dominating factor, the distribution of human capital becomes polarized, whereas in periods during which the global technological externality dominates, convergence ultimately takes place. The study suggests that a poor uneducated economy which values equity as well as prosperity may confront a trade-off between equity in the short run and equity and prosperity in the long run. An economy that prematurely implements a policy designed to enhance equality may be trapped at a low output equilibrium.

Suggested Citation

  • Galor, Oded & Tsiddon, Daniel, 1994. "Human Capital Distribution, Technological Progress, and Economic Growth," CEPR Discussion Papers 971, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:971
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    Citations

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    Cited by:

    1. Kanbur, Ravi, 2000. "Income distribution and development," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 13, pages 791-841, Elsevier.
    2. Mountford, A.W., 1995. "Can a brain drain be good for growth?," Discussion Paper 1995-8, Tilburg University, Center for Economic Research.
    3. Murat F. Iyigun, 1995. "Economic development and intergenerational economic mobility," International Finance Discussion Papers 524, Board of Governors of the Federal Reserve System (U.S.).
    4. Sanghamitra Bandyopadhyay, 2011. "Rich States, Poor States: Convergence And Polarisation In India," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(3), pages 414-436, July.
    5. Michael Groemling, 2002. "Why does redistribution not shrink when equality is high?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 37(4), pages 204-211, July.
    6. Bovenberg, A. Lans & van Ewijk, Casper, 1997. "Progressive taxes, equity, and human capital accumulation in an endogenous growth model with overlapping generations," Journal of Public Economics, Elsevier, vol. 64(2), pages 153-179, May.
    7. Galor, Oded, 1996. "Convergence? Inferences from Theoretical Models," Economic Journal, Royal Economic Society, vol. 106(437), pages 1056-1069, July.
    8. Cetorelli, Nicola, 2002. "Could Prometheus be bound again? A contribution to the convergence controversy," Journal of Economic Dynamics and Control, Elsevier, vol. 27(1), pages 29-50, November.
    9. Adelaide Duarte & Marta Simões, 2010. "Regional growth in Portugal: assessing the contribution of earnings and education inequality," GEMF Working Papers 2010-11, GEMF, Faculty of Economics, University of Coimbra.
    10. Marta Simões & João Andrade & Adelaide Duarte, 2013. "A regional perspective on inequality and growth in Portugal using panel cointegration analysis," International Economics and Economic Policy, Springer, vol. 10(3), pages 427-451, September.
    11. Klaus Waelde, 1996. "Lifetime learning, biased technological change and the evolution of wages in the U.S. 1960 - 1990," Labor and Demography 9601001, University Library of Munich, Germany.
    12. Mountford, Andrew, 1997. "Can a brain drain be good for growth in the source economy?," Journal of Development Economics, Elsevier, vol. 53(2), pages 287-303, August.
    13. Kemnitz, Alexander & Wigger, Berthold U., 2000. "Growth and social security: the role of human capital," European Journal of Political Economy, Elsevier, vol. 16(4), pages 673-683, November.

    More about this item

    Keywords

    Growth; Human Capital; Income Distribution; Kuznets Hypothesis; Overlapping-Generations;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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