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Luddites and the Demographic Transition

  • Kevin H. O'Rourke
  • Ahmed S. Rahman
  • Alan M. Taylor

Technological change was unskilled-labor-biased during the early Industrial Revolution, but is skill-biased today. This is not embedded in extant unified growth models. We develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. Endowments dictate that the early Industrial Revolution be unskilled-labor-biased. Increasing basic knowledge causes a growth takeoff, an income-led demand for fewer educated children, and the transition to skill-biased technological change. The simulated model tracks British industrialization in the 18th and 19th centuries and generates a demographic transition without relying on either rising skill premia or exogenous educational supply shocks.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14484.

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Date of creation: Nov 2008
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Publication status: published as Journal of Economic Growth December 2013, Volume 18, Issue 4, pp 373-409 Luddites, the industrial revolution, and the demographic transition Kevin Hjortshøj O’Rourke, Ahmed S. Rahman, Alan M. Taylor
Handle: RePEc:nbr:nberwo:14484
Note: DAE
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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