40 Pages Posted: 17 Nov 2008
Date Written: November 2008
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.
Suggested Citation: Suggested Citation
O'Rourke, Kevin H. and Rahman, Ahmed and Taylor, Alan M., Luddites and the Demographic Transition (November 2008). NBER Working Paper No. w14484. Available at SSRN: https://ssrn.com/abstract=1301932