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Technological Change, Human Capital Structure, and Multiple Growth Paths

26 Pages Posted: 25 Aug 2011  

Yong Jin Kim

Ajou University

Jong-Wha Lee

Korea University

Multiple version iconThere are 2 versions of this paper

Date Written: September 2011

Abstract

This paper presents a theoretical model to analyze the effects of technology change on growth rates of income and human capital in the uncertain environments of technology. The uncertainty comes from two sources: the possibility of a technology advance and the characteristics of new technologies. We set up an overlapping generations model in which young agents invest in both width and depth of human capital in order to adopt new technologies. The model develops explicitly the micro‚Äźmechanism of the role of human capital in adopting new technologies as well as that of the process of human capital production in the uncertain environments. In our model, a higher level of width of human capital relative to the level of depth leads one country to a higher growth path. We also show that an economy can have different growth paths depending on the initial structure of human capital and the uncertainty about the nature of new technologies. In particular, new technologies with more uncertain characteristics may adversely affect human capital accumulation and income growth, leading the economy to a low growth trap.

Keywords: J24, O33

Suggested Citation

Kim, Yong Jin and Lee, Jong-Wha, Technological Change, Human Capital Structure, and Multiple Growth Paths (September 2011). Japanese Economic Review, Vol. 62, Issue 3, pp. 305-330, 2011. Available at SSRN: https://ssrn.com/abstract=1916509 or http://dx.doi.org/10.1111/j.1468-5876.2009.00507.x

Yong Jin Kim

Ajou University ( email )

Woncheon-dong, Yeongtong-gu
Suwon-si, Gyeonggi-do
Korea, Republic of (South Korea)

Jong-Wha Lee

Korea University ( email )

Anam-dong, Sungbuk-Ku
Dept. of Economics
Seoul, 136-701
82-2-3290-2216 (Phone)
82-2-928-4948 (Fax)

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