EconPapers    
Economics at your fingertips  
 

IQ, Social Mobility and Growth

John Hassler () and José Vicente Rodríguez Mora

No 1827, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Intelligent agents may contribute to higher technological growth if assigned appropriate positions in the economy. These positive effects on growth are unlikely to be internalized on a competitive labour market. The allocation of talent depends on the relative award the market assigns to intelligence versus other individual merits, which will also influence intergenerational social mobility. To illustrate this, we present an endogenous growth model where each agent can choose to be a worker or an entrepreneur. The reward to entrepreneurs is an endogenous function of the abilities they have been endowed by nature as well as of the amount of knowledge and other social assets they inherit from their parents. When growth is low, the equilibrium in the labour market implies that the reward to entrepreneurs depends more on social assets than on intelligence. This gives children of entrepreneurs a large ex-ante advantage over children of workers when working as entrepreneurs, which will cause low intergenerational social mobility and an inefficient allocation of human resources and, consequently, low growth. Conversely, there is also a stable equilibrium with high growth which mitigates the inefficiencies generated by the labour market and implies high intergenerational social mobility.

Keywords: Growth; intelligence; intergenerational social mobility (search for similar items in EconPapers)
JEL-codes: J62 O1 (search for similar items in EconPapers)
Date: 1998-03
References: Add references at CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1827 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: IQ, Social Mobility and Growth (1998)
Working Paper: IQ, Social Mobility and Growth (1998) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:1827

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1827

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2020-06-29
Handle: RePEc:cpr:ceprdp:1827