Dilution effects, population growth and economic growth under human capital accumulation and endogenous technological change

Alberto Bucci (), Levent Eraydin and Moritz Müller

Journal of Macroeconomics, 2019, vol. 62, issue C

Abstract: This paper answers the following two questions: (1) In the data, do we find a dilution effect of population growth also on per-capita human capital investment? If yes, (2) How can we use this observation to explain theoretically the existence of a differential impact of population change on economic growth across countries? In the first part of the article we document empirically considerable cross-country heterogeneity of a dilution effect of population growth with regards to the process of per-capita human capital formation. And we observe that, depending on the dilution effect observed in a given country, population growth may be relevant — either positively or negatively — for economic growth. In the second part of the paper we use these results to build a multi-sector growth model which, by allowing for a country specific dilution effect of population growth on per-capita human capital formation, is capable of accounting for the non-monotonous correlation between demographic and economic growth rates in the long-run.

Keywords: Human capital; Economic growth; Population growth; Dilution effects; Research & development (search for similar items in EconPapers)
JEL-codes: J10 J24 O33 O41 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Working Paper: Dilution effects, population growth and economic growth under human capital accumulation and endogenous technological change (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:62:y:2019:i:c:s0164070417305785

DOI: 10.1016/j.jmacro.2018.08.003

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