Young Workers, Old Workers, and Convergence

50 Pages Posted: 10 Jun 2000 Last revised: 11 Sep 2022

See all articles by Michael Kremer

Michael Kremer

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER); Center for Global Development; Harvard University - Harvard Kennedy School (HKS)

Jim Thomson

affiliation not provided to SSRN

Date Written: August 1994

Abstract

The human capital of young and old workers are imperfect substitutes both in production and in on-the-job training. This helps explain why capital does not flow from rich to poor countries, causing instantaneous convergence of per capita output. If each generation chooses its human capital optimally given that of the previous and succeeding generations, human capital follows a unique rational- expectations path. For moderate substitutability, human capital within each sector oscillates relative to that in other sectors, but aggregate human capital converges to the steady state monotonically, at rates consistent with those observed empirically.

Suggested Citation

Kremer, Michael R. and Thomson, Jim, Young Workers, Old Workers, and Convergence (August 1994). NBER Working Paper No. w4827, Available at SSRN: https://ssrn.com/abstract=226504

Michael R. Kremer (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Rm. 207
Cambridge, MA 02138
United States

Brookings Institution

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Center for Global Development

2055 L St. NW
5th floor
Washington, DC 20036
United States

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Jim Thomson

affiliation not provided to SSRN

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
72
Abstract Views
1,156
Rank
585,331
PlumX Metrics