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Returns to Human Capital and Investment in New Technology

Author

Listed:
  • Rodolfo Luzio
  • Steven V Dunaway
  • Martin D Kaufman

Abstract

This paper presents a simple framework that illustrates the link between skill-based wage differentiation and human capital acquisition given skill-biased technical progress. The analysis points to the economic costs resulting from labor market and income redistribution policies that prevent the skill premium from playing its role in fostering human capital accumulation and the adoption of new technologies. The study compares key economic indicators among Canada, France, Germany, the United Kingdom, and the United States. Differences in wage differen-tiation and investment in new technologies among these countries could be related to policies affecting labor markets; such practices may reflect social choices.

Suggested Citation

  • Rodolfo Luzio & Steven V Dunaway & Martin D Kaufman, 2001. "Returns to Human Capital and Investment in New Technology," IMF Working Papers 01/133, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:01/133
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    References listed on IDEAS

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    8. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1055-1089.
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