Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/11833

TitleCostly investment, complementarities, international technological-knowledge diffusion and the skill premium
Author(s)Afonso, Óscar
Neves, Pedro
Thompson, Maria João Ribeiro
KeywordsTechnological-knowledge bias
Skill premium
Complementarities
Costly investment
Technological-knowledge diffusion
Issue date2010
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Series/Report no.NIPE Working Paper series; 19
Abstract(s)We examine the behaviour of the skill premium in a two-country general equilibrium growth model assuming (i) technological-knowledge diffusion; (ii) internal costly investment in both physical capital and R&D; and (iii) complementarities between intermediate goods in production. We find that these three economic features affect the steady-state growth rate in both countries. However, only in the imitator country do they influence the skill premium. We also find that the steady-state skill premium in the innovator country is affected by its relative labor productivity rather than by its relative labor endowments. This result contrasts with most skill-biased technological change models and suggests that the sustained increase in the skill premium observed in several developed countries over the last three decades may have been due to increases in the relative productive advantage of skilled labor.
TypeWorking paper
URIhttp://hdl.handle.net/1822/11833
Peer-Reviewedno
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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