In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...

/pdf/social-capital-in-the-creation-of-human-capital-1836wo2872.pdf

Social Capital in the Creation of Human Capital

This paper examines whether the Solow growth model is consistent with the international variation in the standard of living. It shows that an augmented Solow model that includes accumulation of human as well as physical capital provides an excellent description of the cross-country data. The paper also examines the implications of the Solow model for convergence in standards of living, that is, for whether poor countries tend to grow faster than rich countries. The evidence indicates that, holding population growth and capital accumulation constant, countries converge at about the rate the augmented Solow model predicts. This paper takes Robert Solow seriously. In his classic 1956 article Solow proposed that we begin the study of economic growth by assuming a standard neoclassical production function with decreasing returns to capital. Taking the rates of saving and population growth as exogenous, he showed that these two vari- ables determine the steady-state level of income per capita. Be- cause saving and population growth rates vary across countries, different countries reach different steady states. Solow's model gives simple testable predictions about how these variables influ- ence the steady-state level of income. The higher the rate of saving, the richer the country. The higher the rate of population growth, the poorer the country. This paper argues that the predictions of the Solow model are, to a first approximation, consistent with the evidence. Examining recently available data for a large set of countries, we find that saving and population growth affect income in the directions that Solow predicted. Moreover, more than half of the cross-country variation in income per capita can be explained by these two variables alone. Yet all is not right for the Solow model. Although the model correctly predicts the directions of the effects of saving and

/pdf/a-contribution-to-the-empirics-of-economic-growth-27cl5gkqam.pdf

A Contribution to the Empirics of Economic Growth

Large sample properties of generalized method of moments estimators

Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

/pdf/endogenous-technological-change-4yzdlw043b.pdf

Endogenous Technological Change

Growth in this model is driven by technological change that arises from intentional investment decisions made by profit maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported, and instead, the equilibriumis one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

https://papers.ssrn.com/sol3/Delivery.cfm/nber_w3210.pdf?abstractid=226703&mirid=1

Externalities and Cities

On the mechanics of economic growth

Three feasible interpretations of cross-sectional hedonic price regression equations are derived from consumer choice, profit maximization by competitive firms, and market clearing, each conceptual experiment deploying a Lancastrian “new approach” to micro theory. Lancaster's theory is compared with those consumer theories of Houthakker heritage, and some limitations of each are indicated. The assertion that Adelman and Griliches' quality-adjusted hedonic price index is a constant satisfaction index is shown to necessitate interpersonal comparisons of utility, and the possibility of identifying demand and supply functions for commodities by exclusion restrictions on characteristics is rejected.

Hedonic price functions

Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe

Employment laws in India and Zimbabwe require employers to obtain permission from the government to retrench or lay off workers. The effect of these laws on the demand for employees in 64 manufacturing industries is examined using time series data. Little evidence is found indicating slower adjustments in employment levels and hence retardation in any structural adjustment following the new laws. However, in both countries a substantial decline in the demand for employees (other things equal) followed the new legislation. In Zimbabwe it is difficult to be precise about a causal connection between the drop in the demand for labor (allowing for concurrent increased wages) and the new legislation because enactment occurred simultaneously with Independence; however, the current economic climate induced high levels of investment in capital but not investments in long-term commitments to employees. But in India further evidence supports a causal connection: larger establishments covered by the job security regulations tended to experience a decline in the demand for labor while smaller, uncovered enterprises in the same industries did not; moreover the decline in demand for employees across industries in India was larger where the private sector predominates, where larger establishments covered by the new laws are important, and where a smaller proportion of employees are union members. Thus in both countries the policy implemented to protect jobs may bave resulted infarfewerjobs. Upon achieving independence in 1980, the government of Zimbabwe passed a new Employment Act, requiring employers to obtain permission from the Ministry of Labor to fire or lay off workers. Comparable regulations were imposed in India by the Industrial Disputes (Amendment) Act of 1976, requiring that written permission be obtained, normally from the relevant state government, either to close a plant or to retrench workers. The immediate goal of these items of legislation was to protect the livelihood of workers and to maintain jobs. Any addition to economic security in the lives of workers is clearly a laudable goal in its own right. But the question addressed in this article is whether these particular job security regulations have had undesirable side effects, which may even have thwarted the original goals of the legislation. India and Zimbabwe are

Robert E. Lucas

Papers

Externalities and Cities

On the mechanics of economic growth

Hedonic price functions

Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe

The Impact of Changes in Job Security Regulations in India and Zimbabwe