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Growth And Wage Inequality In A Scale‐Independent Model With R&D And Human‐Capital Accumulation

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  • OSCAR AFONSO
Abstract
We present a dynamic, non‐scale general equilibrium model with two human‐capital types where Schumpeterian R&D and human‐capital accumulation are the engines of growth and wage inequality. In particular, wage inequality is encouraged by relative changes in supply and demand of both human‐capital types. Relative supply restricts employed human‐capital levels. Relative demand is instantly affected by a new general‐purpose technology and, as in the skill‐biased technological change literature, by technological‐knowledge bias. By considering substitutability between technologies and complementarity between inputs, the bias is driven by the price channel (not by the market‐size channel) and is affected by human‐capital accumulation.

Suggested Citation

  • Oscar Afonso, 2010. "Growth And Wage Inequality In A Scale‐Independent Model With R&D And Human‐Capital Accumulation," Manchester School, University of Manchester, vol. 78(2), pages 149-182, March.
    • Handle: RePEc:bla:manchs:v:78:y:2010:i:2:p:149-182
    DOI: 10.1111/j.1467-9957.2009.02135.x
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