Ideology, Human Capital, and Growth

University of Colorado Working Paper No. 01-2

32 Pages Posted: 16 Apr 2001

See all articles by Murat Iyigun

Murat Iyigun

University of Colorado at Boulder - Department of Economics; Harvard University - Center for International Development (CID); IZA Institute of Labor Economics

Naci H. Mocan

Louisiana State University, Baton Rouge - Department of Economics; National Bureau of Economic Research (NBER)

Ann L. Owen

Hamilton College - Economics Department

Date Written: March 2001

Abstract

We develop an endogenous growth model in which technological progress raises the efficiency of time allocated to education and knowledge and ideology play complementary roles in determining individuals' efficiency units of labor input. A higher supply of aggregate units of efficiency labor generates incentives to invent new technologies because it raises the monopoly rents from the introduction of such technologies. We show that economies with initially "fact-consistent" ideologies are likely to invest more in education and as a result experience faster technological progress and growth. Somewhat paradoxically, we also demonstrate that those economies that start out with relatively more fact-consistent ideologies are the ones likely to experience a weakening support for their ideologies. Support for flexible ideologies that evolve over time remains high even in the long run. When there exists a feedback loop between education and ideology, a flawed ideology may be better for growth and development than no ideology. Finally, the frequency with which ideologies are adopted and spread may be decreasing in the sophistication of technology.

Keywords: Technological progress, growth, human capital

JEL Classification: D80, J24, O33, O40

Suggested Citation

Iyigun, Murat F. and Mocan, Naci H. and Owen, Ann L., Ideology, Human Capital, and Growth (March 2001). University of Colorado Working Paper No. 01-2, Available at SSRN: https://ssrn.com/abstract=262332 or http://dx.doi.org/10.2139/ssrn.262332

Murat F. Iyigun (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309
United States
303-492-6653 (Phone)
303-492-8622 (Fax)

Harvard University - Center for International Development (CID) ( email )

One Eliot Street Building
79 JFK Street
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Naci H. Mocan

Louisiana State University, Baton Rouge - Department of Economics ( email )

Department of economics
Baton Rouge, LA 70803-6308
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ann L. Owen

Hamilton College - Economics Department ( email )

198 College Hill Road
Clinton, NY 13323
United States
315-859-4419 (Phone)
303-859-4477 (Fax)

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