IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Human Capital, Externalities and Growth in an Overlapping Generation Model


We consider an overlapping generations model with endogenous labor supplies by young and old and a human capital accumulation process that relies on the interaction of these two types of labor. This interaction is not understood by the market hence we analyze fiscal policies designed to remedy this. We argue that taxes must be acceptable to people alive at the time of planning. This makes many proposed taxes unfeasible. Two distinct paths to growth emerge; one through increased savings and another through increased workforce participation. The long run rate of growth depends entirely on human capital but we find this to be of little relevance. Some simulation results are presented for two stylized economic blocks calibrated on the USA and the EURO-zone.

(This abstract was borrowed from another version of this item.)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Our checks indicate that this address may not be valid because: 500 Can't connect to If this is indeed the case, please notify ()

Download Restriction: no

Paper provided by ERMES, University Paris 2 in its series Working Papers ERMES with number 0513.

in new window

Date of creation: 2005
Date of revision:
Handle: RePEc:erm:papers:0513
Contact details of provider: Postal: 12, place du Panthéon, 75230 Paris Cedex 05
Phone: (33) 1 44 41 89 61 (66)
Fax: (33) 1 40 51 81 30
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Samuel Bentolila & Gilles Saint Paul, 1999. "Explaining movements in the labor share," Economics Working Papers 374, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Boyan Jovanovic & Yaw Nyarko, 1994. "The Transfer of Human Capital," NBER Working Papers 4823, National Bureau of Economic Research, Inc.
  3. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
  4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  5. Bottazzi, Laura & Peri, Giovanni, 2003. "Innovation and spillovers in regions: Evidence from European patent data," European Economic Review, Elsevier, vol. 47(4), pages 687-710, August.
  6. Meir Kohn & Nancy Marion, 1992. "The Implications of Knowledge-Based Growth for the Optimality of Open Capital Markets," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 865-83, November.
  7. Hu, Sheng Cheng, 1979. "Social Security, the Supply of Labor, and Capital Accumulation," American Economic Review, American Economic Association, vol. 69(3), pages 274-83, June.
  8. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  9. Park, No-Ho, 1991. "Steady-state solutions of optimal tax mixes in an overlapping-generations model," Journal of Public Economics, Elsevier, vol. 46(2), pages 227-246, November.
  10. Jess Benhabib & Boyan Jovanovic, 1989. "Externalities and Growth Accounting," NBER Working Papers 3190, National Bureau of Economic Research, Inc.
  11. Kazi Iqbal & Stephen J. Turnovsky, 2008. "Intergenerational Allocation of Government Expenditures: Externalities and Optimal Taxation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(1), pages 27-53, 02.
  12. Flemming, J. S., 1977. "Optimal payroll taxes and social security funding : Some transitional problems for a closed economy," Journal of Public Economics, Elsevier, vol. 7(3), pages 329-349, June.
  13. Ordover, Janusz A., 1976. "Distributive justice and optimal taxation of wages and interest in a growing economy," Journal of Public Economics, Elsevier, vol. 5(1-2), pages 139-160.
  14. Phelps, Edmund S & Riley, J G, 1978. "Rawlsian Growth: Dynamic Programming of Capital and Wealth for Intergeneration "Maximin" Justice," Review of Economic Studies, Wiley Blackwell, vol. 45(1), pages 103-20, February.
  15. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:erm:papers:0513. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.