Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/75557 
Authors: 
Year of Publication: 
2000
Series/Report no.: 
CESifo Working Paper No. 355
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
To examine how human capital accumulation influences both economic growth and income inequality, we carefully endogenize the demand and supply of skills. We explicitly introduce the costs and externalities in education, and examine how both relate to learning-by-doing and R&D intensity. In addition, we endogenize the determinants of the skill-bias of labor demand: the complementarity between technology and skilled and unskilled labor. Our results identify parameters that are central to the evolution of inequality during the development process. We characterise development thresholds when countries switch endogenously from pure learning to directed R&D, and we show that technical change can generate multiple steady states that are consistent with the cross-country data on inequality and skill-premia.
Subjects: 
Human capital
wage inequality
biased technical change
threshold externalities
JEL: 
J31
O40
Document Type: 
Working Paper
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