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Resource-augmenting R&D with heterogeneous labor supply

Published online by Cambridge University Press:  10 December 2008

JEAN-PIERRE AMIGUES ,
MICHEL MOREAUX  and
FRANCESCO RICCI
JEAN-PIERRE AMIGUES
Affiliation:
Toulouse School of Economics and INRA (IDEI and LERNA)
MICHEL MOREAUX
Affiliation:
Toulouse School of Economics (IUF, IDEI and LERNA)
FRANCESCO RICCI*
Affiliation:
Université de Cergy-Pontoise (THEMA) and Toulouse School of Economics (LERNA).
*
Address: LERNA-TSE, Manufacture des Tabacs, 21 allée de Brienne, 31000 Toulouse, France. Email: [email protected]
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Abstract

The effective labor possibilities frontier (ELPF) is defined as the set of statically efficient allocations of labor inputs in the competing tasks of production and R&D. It is concave if labor is heterogeneous. In an R&D-based growth model with an essential non-renewable natural resource, the shape of the ELPF affects the optimal speed of the transition. If resource endowment is poor, transition is slower and involves a smaller R&D effort, and slower growth in per capita consumption, in the case of a heterogeneous labor force as compared to a homogeneous one. Policies that modify the distribution of skills in the population imply shifts of the ELPF. We provide a taxonomy of possible shifts of the ELPF, and link them to education policy or demographic trends.

Type
Research Article
Information
Environment and Development Economics , Volume 13 , Issue 6: SUSTAINABLE DEVELOPMENT , December 2008 , pp. 719 - 745
Copyright
Copyright © Cambridge University Press 2008

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