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Endogenous Education and Long-Run Factor Shares

Gene M. Grossman, Elhanan Helpman, Ezra Oberfield () and Thomas Sampson

American Economic Review: Insights, 2021, vol. 3, issue 2, 215-32

Abstract: We study the determinants of factor shares in a neoclassical environment with capital-skill complementarity and endogenous education. In this environment estimates of the elasticity of substitution between capital and labor that fail to account for human capital levels will be biased upward. We develop a model with overlapping generations, technology-driven neoclassical growth, and ongoing increases in educational attainment. For a class of production functions featuring capital-skill complementarity, a balanced growth path exists and is characterized by an inverse relationship between the rates of capital- and labor-augmenting technological progress and the capital share in national income.

JEL-codes: D33 E25 J24 O33 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Endogenous education and long-run factor shares (2021) Downloads
Working Paper: Endogenous Education and Long-Run Factor Shares (2020) Downloads
Working Paper: Endogenous Education and Long-Run Factor Shares (2020) Downloads
Working Paper: Endogenous Education and Long-Run Factor Shares (2020) Downloads
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DOI: 10.1257/aeri.20200350

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