scholarly journals Education and Human Capital Accumulation in a Two -Sector Growth Model with Elastic Labor Supply

2012 ◽  
Vol 59 (1) ◽  
Author(s):  
Wei-Bin Zhang
Keyword(s):  
Human Capital ◽  
Labor Supply ◽  
Growth Model ◽  
Capital Accumulation ◽  
Human Capital Accumulation ◽  
Elastic Labor Supply

Micro and Macro Labor Supply Elasticities: A Reassessment of Conventional Wisdom

2012 ◽  
Vol 50 (2) ◽  
pp. 464-476 ◽  
Author(s):  
Michael Keane ◽  
Richard Rogerson
Keyword(s):  
Human Capital ◽  
Life Cycle ◽  
Optimal Design ◽  
Labor Supply ◽  
Capital Accumulation ◽  
Conventional Wisdom ◽  
Human Capital Accumulation ◽  
Micro Data ◽  
Large Aggregate ◽  
Economic Issues

The response of aggregate labor supply to various changes in the economic environment is central to many economic issues, especially the optimal design of tax policies. Conventional wisdom based on studies in the 1980s and 1990s has long held that the analysis of micro data leads one to conclude that aggregate labor supply elasticities are quite small. In this paper we argue that this conventional wisdom does not hold up to empirically reasonable and relevant extensions of simple life cycle models that served as the basis for these conclusions. In particular, we show that several pieces of conventional wisdom fail in the presence of human capital accumulation or labor supply decisions that allow for adjustment along both the extensive and intensive margin. We conclude that previous estimates of small labor supply elasticities based on micro data are fully consistent with large aggregate labor supply elasticities. (JEL D91, E24, J22)

scholarly journals Nonconvexities, Retirement, and the Elasticity of Labor Supply

2013 ◽  
Vol 103 (4) ◽  
pp. 1445-1462 ◽  
Author(s):  
Richard Rogerson ◽  
Johanna Wallenius
Keyword(s):  
Human Capital ◽  
Life Cycle ◽  
Labor Supply ◽  
Capital Accumulation ◽  
Credit Constraints ◽  
Elasticity Of Substitution ◽  
Human Capital Accumulation ◽  
Hours Worked ◽  
Younger Workers ◽  
Life Cycle Models

We consider two life cycle models of labor supply that use nonconvexities to generate retirement. In each case we derive a link between hours worked prior to retirement, the intertemporal elasticity of substitution for labor (IES), and the size of the nonconvexities. This link is robust to allowing for credit constraints and human capital accumulation by younger workers and suggests values for the IES that are .75 or higher. (JEL D91, J22, J24, J26)

scholarly journals GLOBAL DEVELOPMENT, TRADE, HUMAN CAPITAL, AND BUSINESS CYCLES

2020 ◽  
Vol 5 (Special) ◽  
pp. 9-29
Author(s):  
Wei-Bin Zhang
Keyword(s):  
Human Capital ◽  
Growth Model ◽  
Capital Accumulation ◽  
Equilibrium Points ◽  
Human Capital Accumulation ◽  
Learning Abilities ◽  
Exogenous Shocks ◽  
Trade Model ◽  
Comprehensive Framework ◽  
National Economies

This paper generalizes the multi-country growth model with capital accumulation, human capital accumulation, economic structure and international trade by Zhang (2014) by making all the time-independent parameters in Zhang’s model as time-dependent parameters. Each national economy consists of one tradable, one non-tradable and one education sector. National economies are different in propensities to save, to obtain education and to consume, and in learning abilities. The model integrates the Solow growth model, the Uzawa two-sector growth model, the Uzawa-Lucas two-sector growth model, and the Oniki–Uzawa trade model within a comprehensive framework. Human capital accumulation is through education in the Uzawa-Lucas model, Arrow’s learning by producing, and Zhang’s learning by consuming (creative learning). The behavior of the household is described with an alternative approach to household behavior. We simulated the model to demonstrate existence of equilibrium points, motion of the dynamic system, and oscillations due to different exogenous shocks.

scholarly journals HUMAN CAPITAL AND INNOVATION IN A MONETARY SCHUMPETERIAN GROWTH MODEL

2017 ◽  
Vol 23 (5) ◽  
pp. 1875-1894 ◽  
Author(s):  
Angus C. Chu ◽  
Lei Ning ◽  
Dongming Zhu
Keyword(s):  
Monetary Policy ◽  
Human Capital ◽  
Interest Rate ◽  
Growth Model ◽  
Growth Rates ◽  
Capital Accumulation ◽  
Nominal Interest Rate ◽  
Human Capital Accumulation ◽  
Schumpeterian Growth ◽  
Long Run

This study explores the growth and welfare effects of monetary policy in a scale-invariant Schumpeterian growth model with endogenous human capital accumulation. We model money demand via a cash-in-advance (CIA) constraint on research and development (R&D) investment. Our results can be summarized as follows. We find that an increase in the nominal interest rate leads to a decrease in R&D and human capital investment, which, in turn, reduces the long-run growth rates of technology and output. This result stands in stark contrast to the case of exogenous human capital accumulation in which the long-run growth rates of technology and output are independent of the nominal interest rate. Simulating the transitional dynamics, we find that the additional long-run growth effect under endogenous human capital accumulation amplifies the welfare effect of monetary policy. Decreasing the nominal interest rate from 10% to 0% leads to a welfare gain that is equivalent to a permanent increase in consumption of 2.82% (2.38%) under endogenous (exogenous) human capital accumulation.

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