Skill-Structure Shocks, the Share of the High-Tech Sector and Economic Growth Dynamics

Pedro Gil, Oscar Afonso and Paulo B. Vasconcelos ()
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Paulo B. Vasconcelos: Faculdade de Economia, Universidade do Porto

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: By means of an endogenous growth model of directed technical change with vertical and horizontal R&D, we study a transitional-dynamics mechanism that is consistent with the changes in the share of the high- versus the low-tech sectors found in recent European data. Under the hypothesis of a positive shock in the proportion of high-skilled labour, the technological-knowledge bias channel leads to nonbalanced sectoral growth with a noticeable shift of resources across sectors. A simple calibration exercise suggests that, under prevailing market-scale effects, the model is able to account for up to 50 to 100 percent of the increase in the share of the high-tech sector observed in the data from 1995 to 2007. However, the model predicts that the dynamics of the share of the high-tech sector has no significant impact on the economic growth rate.

Keywords: industry dynamics; high tech; low tech; directed technical change; economic growth (search for similar items in EconPapers)
JEL-codes: O31 O41 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2015-01
New Economics Papers: this item is included in nep-fdg, nep-gro and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:554

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