Labor Supply, Biased Technological Change and Economic Growth

Publicado en

  • Revista ESPE - Ensayos Sobre Política Económica


  • We consider a model of factor saving innovations and study the effects of exogenous changes in labor supply. In a biased innovations setting, as economies accumulate capital, labor becomes relatively scarce and expensive. As a consequence, incentives for la-bor saving and capital using innovations appear. By the same token, exogenous changes in labor supply affect factor prices. In general, a reduction in la-bor supply decreases current output and generates incentives for labor saving innovations. Therefore, the effect that a change in the supply of labor has on factor prices is mitigated and, depending on the initial conditions, it may be contrasted by the effect of the technological bias. Finally, the movements of the factor prices affect the saving decisions and consequently the dynamics of economic growth. We explore the consequences of an exogenous de-crease in labor supply in two different settings: a homogenous agents model with infi nite horizon and an overlapping generations model

fecha de publicación

  • 2007

Líneas de investigación

  • Economic Growth
  • Factor Income Shares
  • Labor Supply

Página inicial

  • 260

Última página

  • 286


  • 25


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