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Technology frontier, labor productivity and economic growth: Evidence from OECD countries

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  • Azomahou, Theophile

    (UNU-MERIT)

  • Diene, Bity

    (CREA, University of Luxembourg)

  • Diene, Mbaye

    (CRES, Universite Cheikh Anta Diop)

Abstract

We use 29 OECD countries data spanning over 1960-2000 to study the growth strategy when countries are close to the technology frontier. Relying on a semi-parametric generalized additive model, we estimate labor productivity equations. We find that the number of agents enrolled in higher education is a determinant of growth. Moreover, when a country is sufficiently near the technology frontier thanks to an increasing R&D expenditure, it becomes optimal to invest in fundamental research, since after a short period of efficiency, business R&D can no longer ensure the transition toward the technology frontier, while higher education presents the opposite shape. These findings support the main assertion of Aghion and Cohen (2004) that countries which are near the technology frontier have to invest in higher education while those far away from the frontier make their technology level growing up by investing in primary and secondary schooling.

Suggested Citation

  • Azomahou, Theophile & Diene, Bity & Diene, Mbaye, 2009. "Technology frontier, labor productivity and economic growth: Evidence from OECD countries," MERIT Working Papers 2009-059, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2009059
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    File URL: https://www.merit.unu.edu/publications/wppdf/2009/wp2009-059.pdf
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    References listed on IDEAS

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    Cited by:

    1. M. Danquah & B. Ouattara, 2014. "Productivity Growth, Human Capital And Distance To Frontier In Sub-Saharan Africa," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(4), pages 27-48, December.
    2. Douanla Tayo, Lionel & AbomoFouda, Marcel Olivier, 2016. "Government spending in education and economic growth in Cameroon. A Vector error Correction Model approach," MPRA Paper 61881, University Library of Munich, Germany.
    3. Abdoulaye Diagne & Bity Diene, 2011. "Estimating Returns to Higher Education: A Survey of Models, Methods and Empirical Evidence," Journal of African Economies, Centre for the Study of African Economies, vol. 20(suppl_3), pages -132, August.
    4. Douanla Tayo, Lionel & Abomo Fouda, Marcel Olivier, 2015. "Government spending in education and economic growth in Cameroon:a Vector error Correction Model approach," MPRA Paper 62008, University Library of Munich, Germany.

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    More about this item

    Keywords

    Education; R&D; Labor Productivity; Economic Growth;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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