Human Capital and Innovation: A Model of Endogenous Growth With a 'Skill-Loss Effect'

Economics Bulletin, Vol. 3, No. 21, pp. 1-8, 2008

18 Pages Posted: 24 Sep 2007 Last revised: 1 Jul 2014

See all articles by Silvia London

Silvia London

National University of the South - Facultad de Economia; Republic of Argentina - Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET)

Juan Gabriel Brida

Universidad de la República

Wiston Adrián Risso

University of Siena - Department of Economics

Date Written: September 1, 2007

Abstract

The present paper argues that, in line with Nelson-Phelps (1966), there exist important complementarities among educational attainment, R&D activities (and their derived innovations) and economic growth, although subject to a "skill-loss effect" (δ-effect), due to the presence of workers who have to perform jobs that require other capacities than the ones they have. Taking Redding's (1996) formal framework, the main result of our model suggests that the more distorted the labour market is, the stronger must be the investment in R&D necessary to attain a positive economic growth rate.

Keywords: endogenous growth, human capital, education

JEL Classification: O41, C0

Suggested Citation

London, Silvia and Brida, Juan Gabriel and Risso, Wiston Adrián, Human Capital and Innovation: A Model of Endogenous Growth With a 'Skill-Loss Effect' (September 1, 2007). Economics Bulletin, Vol. 3, No. 21, pp. 1-8, 2008, Available at SSRN: https://ssrn.com/abstract=1016070

Silvia London (Contact Author)

National University of the South - Facultad de Economia ( email )

Argentina

Republic of Argentina - Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET) ( email )

Avda. Rivadavia 1917
Buenos Aires, Federal Capital C1033AAJ
Argentina

Juan Gabriel Brida

Universidad de la República ( email )

Av. 18 de Julio
Montevideo, 1968
Uruguay

Wiston Adrián Risso

University of Siena - Department of Economics ( email )

Piazza S. Francesco, 7
Siena, I-53100
Italy
00390577235058 (Phone)

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