Technological Progress, Mobility and Economic Growth

CEPR Discussion Paper Series 1413

Posted: 22 Jan 1997

See all articles by Oded Galor

Oded Galor

Brown University - Department of Economics; Centre for Economic Policy Research (CEPR)

Daniel Tsiddon

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER)

Date Written: June 1996

Abstract

This paper analyzes the relationship between technological progress, intergenerational earnings mobility, and economic growth. The analysis demonstrates that the interplay between technological progress and two components that determine individual earnings--parental human capital and individual ability--governs mobility, technological progress, and economic growth. In periods of major technological inventions the ability effect is the dominating factor. The decline in the relative importance of initial parental conditions (i.e., the driving force behind the persistence of inequality) enhances mobility and generates a larger concentration of high-ability individuals in technologically advanced sectors, stimulating further technological progress and economic growth. Once existing technologies become more accessible, however, mobility is diminished and inequality becomes more persistent. The reduction in the concentration of human capital in technologically advanced sectors diminishes the likelihood of major technological breakthroughs and slows down future economic growth. User friendliness, therefore, becomes unfriendly to future economic growth.

JEL Classification: D31, J62, O40

Suggested Citation

Galor, Oded and Tsiddon, Daniel, Technological Progress, Mobility and Economic Growth (June 1996). CEPR Discussion Paper Series 1413. Available at SSRN: https://ssrn.com/abstract=3666

Oded Galor (Contact Author)

Brown University - Department of Economics ( email )

Providence, RI 02912
United States

HOME PAGE: http://www.econ.brown.edu/fac/Oded_Galor/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

HOME PAGE: http://www.econ.brown.edu/fac/Oded_Galor/

Daniel Tsiddon

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
(972 3) 640 9218 (Phone)
(972 3) 640 9908 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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