Population Growth, Technological Adoption and Economic Outcomes: A Theory of Cross-Country Differences for the Information Era

72 Pages Posted: 8 Mar 2001 Last revised: 9 Oct 2022

See all articles by Paul Beaudry

Paul Beaudry

University of British Columbia (UBC) - Vancouver School of Economics; National Bureau of Economic Research (NBER)

David A. Green

University of British Columbia (UBC) - Department of Economics

Date Written: March 2001

Abstract

The object of this paper is to show how population growth, through its interaction with recent technological and organizational developments, can account for many of the cross-country differences in economic outcome observed among industrialized countries over the last 20 years. In particular, our model illustrates how a large decrease in the price of information technology can create a comparative advantage for high population growth economies to jump ahead in the adoption of computer- and skill-intensive models of production as a means to exploiting their relative abundance of human capital versus physical capital. The predictions of the model are that, over the span of the information revolution, industrial countries with higher population growth rates will experience a more pronounced adoption of new technology, a better performance in terms of increased employment rates, a poorer performance in terms of wage growth for less skilled workers, a larger increase in the service sector and a larger increase in the returns to education. We provide preliminary evidence in suport of the theory based on a comparative study of observed developments in the US, UK and Germany since the mid-seventies, complemented by an examination of broad wage and employment changes for 18 OECD countries over the same period.

Suggested Citation

Beaudry, Paul and Green, David Alan, Population Growth, Technological Adoption and Economic Outcomes: A Theory of Cross-Country Differences for the Information Era (March 2001). NBER Working Paper No. w8149, Available at SSRN: https://ssrn.com/abstract=262104

Paul Beaudry (Contact Author)

University of British Columbia (UBC) - Vancouver School of Economics ( email )

997-1873 East Mall
Vancouver, British Columbia V6T 1Z1
Canada

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David Alan Green

University of British Columbia (UBC) - Department of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada
604-822-8216 (Phone)
604-822-5915 (Fax)