Returns to Human Capital and Investment in New Technology

30 Pages Posted: 2 Feb 2006

See all articles by Martin Kaufman

Martin Kaufman

International Monetary Fund (IMF) - Western Hemisphere Department

Rodolfo Luzio

International Monetary Fund (IMF) - Western Hemisphere Department

Steven Dunaway

International Monetary Fund (IMF) - Western Hemisphere Department

Date Written: September 2001

Abstract

This paper presents a simple framework that illustrates the link between skill-based wage differentiation and human capital acquisition given skill-biased technical progress. The analysis points to the economic costs resulting from labor market and income redistribution policies that prevent the skill premium from playing its role in fostering human capital accumulation and the adoption of new technologies. The study compares key economic indicators among Canada, France, Germany, the United Kingdom, and the United States. Differences in wage differentiation and investment in new technologies among these countries could be related to policies affecting labor markets; such practices may reflect social choices.

Keywords: New technology, human capital, wage premium, income redistribution policies

JEL Classification: C50, E60, H20, J24, J31

Suggested Citation

Kaufman, Martin and Luzio, Rodolfo and Dunaway, Steven, Returns to Human Capital and Investment in New Technology (September 2001). IMF Working Paper No. 01/133, Available at SSRN: https://ssrn.com/abstract=879910

Martin Kaufman (Contact Author)

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Rodolfo Luzio

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Steven Dunaway

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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