Resource-augmenting R&D with heterogeneous labor supply

Jean-Pierre Amigues (), Michel Moreaux and Francesco Ricci

Environment and Development Economics, 2008, vol. 13, issue 06, pages 719-745

Abstract: The effective labor possibilities frontier (ELPF) is defined as the set of statically efficient allocations of labor inputs in the competing tasks of production and R D. It is concave if labor is heterogeneous. In an R D-based growth model with an essential non-renewable natural resource, the shape of the ELPF affects the optimal speed of the transition. If resource endowment is poor, transition is slower and involves a smaller R D effort, and slower growth in per capita consumption, in the case of a heterogeneous labor force as compared to a homogeneous one. Policies that modify the distribution of skills in the population imply shifts of the ELPF. We provide a taxonomy of possible shifts of the ELPF, and link them to education policy or demographic trends.

Date: 2008
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