Luddites, the industrial revolution, and the demographic transition
Kevin O’Rourke (),
Ahmed Rahman () and
Alan Taylor ()
Authors registered in the RePEc Author Service: Kevin Hjortshøj O'Rourke ()
Journal of Economic Growth, 2013, vol. 18, issue 4, 373-409
Technological change was unskilled-labor-biased during the early industrial revolution, but is skill-biased today. This implies a rich set of non-monotonic macroeconomic dynamics which are not embedded in extant unified growth models. We present historical evidence and develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. In a setup with directed technological change, and fixed as well as variable costs of education, initial endowments dictate that the early industrial revolution be unskilled-labor-biased. Increasing basic knowledge then causes a growth takeoff, an income-led demand for fewer but more educated children, and a transition to skill-biased technological change in the long run. Copyright Springer Science+Business Media New York 2013
Keywords: Skill bias; Directed technological change; Endogenous growth; Demography; Unified growth theory; O31; O33; J13; J24; N10 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jecgro:v:18:y:2013:i:4:p:373-409
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