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Overcoming the natural resource constraint through dedicated R&D effort with heterogenous labor supply

  • Jean-Pierre Amigues

    ()

    (Université de Toulouse 1 and INRA (IDEI and LERNA))

  • Michel Moreaux

    ()

    (Université de Toulouse 1 (IUF, IDEI and LERNA))

  • Francesco Ricci

    ()

    (Université de Cergy-Pontoise (THEMA) and LERNA)

The effective labor possibility frontier (ELPF) is defined as the set of statically efficient allocations of labor imputs in the competing tasks of production and R&D. It summaries the labor scarcity constraint. We show that the dynamically efficient paths of R&D, resource extraction and consumption depend on the shape of the ELPF, while their steady state levels do not. In the case of an initial low endowment of resources, the transition to the stationary state is characterized by lower R&D effort, slower growth of per-capita consumption and a longer transition when labor is relatively specialized than when it is more flexible. We analyse policy options for modifying the shape of the ELPF, such as increasing the size of the labor force, subsiding higher education or lifelong learning.

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Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2006-16.

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Date of creation: 2006
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Handle: RePEc:ema:worpap:2006-16
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