Economic growth, the high-tech sector, and the high skilled: Theory and quantitative implications

Pedro Gil, Oscar Afonso and Paulo Brito ()

Structural Change and Economic Dynamics, 2019, vol. 51, issue C, 89-105

Abstract: Europe's “2020 Strategy” has the main goal of stimulating economic growth by increasing the weight of the high-tech sector and the share of high-skilled workers. However, cross-country European data suggests the relationship between economic growth and both the technology structure and the skill structure is statistically insignificant. We investigate an analytical mechanism that connects these facts by extending a directed-technical-change growth model and taking it to the data. Under high relative barriers to entry into the high-tech sector and scale effects we replicate the empirical relationships. We derive quantitative policy implications on the effects of a reduction of barriers to entry.

Keywords: Growth; High skilled; High tech; Scale effects; Directed technical change (search for similar items in EconPapers)
JEL-codes: O31 O41 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:51:y:2019:i:c:p:89-105

DOI: 10.1016/j.strueco.2019.07.003

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