Capital deepening

About: Capital deepening is a research topic. Over the lifetime, 5203 publications have been published within this topic receiving 230297 citations.

Chapter 44 Labor markets and economic growth

Abstract: Publisher Summary Among macroeconomists, the shift of research effort is near total, eclipsing the business-cycle focus that had dominated the field for decades. Behind this is a recognition of the enormous welfare implications of sustained economic growth, and a renewed desire to understand the vast differences in living standards among countries, which dates back at least to Smith. What some have called the "neoclassical revival" in growth economics has come to dominate macroeconomic research. Developments in this area should be of particular interest to labor economists because much of the revival of growth economics builds on the theory of human capital. Because human capital is, by definition, embodied skills and knowledge, and because advances in technical knowledge drive economic growth, it follows that human capital accumulation and economic growth are intimately related. This chapter reviews recent developments in growth economics, with a particular focus on labor market and human capital issues.

Schooling and Public Capital in a Model of Endogenous Growth

Abstract: This paper studies the allocation of public spending between education services and infrastructure investment in an endogenous growth model where public capital in infrastructure affects the process of human capital accumulation The balanced growth path is derived and the dynamics associated with a budget-neutral reallocation of spending from education to infrastructure are studied through numerical simulations The growth-maximizing tax rate is shown to depend only on the production technology (as in standard flow models of public expenditure), whereas the optimal share of infrastructure investment depends also on the “productiveness” of infrastructure (relative to education services) in the schooling technology

Endogenous growth, human capital, and industry wages

Abstract: Lucas' model (1988) of external effects of human capital formation is taken as a starting point for looking at the impact of human capital on wages. Even though most empirical tests of New Growth Theory are made using time-series and cross-sections of countries — with good reasons — I suggest a microeconometric approach in order to test Lucas' basic assumption of external effects of human capital. As a first step, internal effects of education are filtered out by using wage functions for individuals in Austria. In the second step, resulting industry wage premiums are regressed on industry-specific characteristics and, above all, on average human capital in the industry to account for external effects of human capital.