Externalities of human capital

Stefano Bosi; Teresa Lloyd-Braga; Kazuo Nishimura

doi:10.1016/j.mathsocsci.2021.03.013

Externalities of human capital

Stefano Bosi^*, Teresa Lloyd-Braga, Kazuo Nishimura

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

7 Citations (Scopus)

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Abstract

Investments in human capital are individual and collective choices carrying significant external effects. Educated parents and friends accelerate our own human capital accumulation. Skilled colleagues at work increase our own productivity. Sharing experiences with cultured people is gratifying by itself. We introduce human capital externalities in a stylized model à la Uzawa (1965) and we find that growth can be no longer balanced and the equilibrium can be globally indeterminate. Labor supply goes to one and capital reaches an upper ceiling in a finite lapse of time above the initial critical value of labor supply ensuring the balanced growth path. Under a constant tax rate, the government should set a positive rate to speed up human capital accumulation during transition to the capital ceiling.

Original language	English
Pages (from-to)	145-158
Number of pages	14
Journal	Mathematical Social Sciences
Volume	112
DOIs	https://doi.org/10.1016/j.mathsocsci.2021.03.013
Publication status	Published - Jul 2021

Keywords

Externalities
Growth
Human capital

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.mathsocsci.2021.03.013

31818420Accepted author manuscript, 297 KBLicence: CC BY-NC-ND

http://hdl.handle.net/10400.14/34905Licence: CC BY-NC-ND

Cite this

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title = "Externalities of human capital",

abstract = "Investments in human capital are individual and collective choices carrying significant external effects. Educated parents and friends accelerate our own human capital accumulation. Skilled colleagues at work increase our own productivity. Sharing experiences with cultured people is gratifying by itself. We introduce human capital externalities in a stylized model {\`a} la Uzawa (1965) and we find that growth can be no longer balanced and the equilibrium can be globally indeterminate. Labor supply goes to one and capital reaches an upper ceiling in a finite lapse of time above the initial critical value of labor supply ensuring the balanced growth path. Under a constant tax rate, the government should set a positive rate to speed up human capital accumulation during transition to the capital ceiling.",

keywords = "Externalities, Growth, Human capital",

author = "Stefano Bosi and Teresa Lloyd-Braga and Kazuo Nishimura",

note = "Funding Information: We would like to thank Alain Venditti for helpful comments on the paper. This work is supported by the JSPS, Japan Grants-in-Aid #15H05729 and #16H03598 , and the LABEX MME-DII, France ( ANR11-LBX-0023-01 ). Publisher Copyright: {\textcopyright} 2021 Elsevier B.V.",

year = "2021",

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doi = "10.1016/j.mathsocsci.2021.03.013",

language = "English",

volume = "112",

pages = "145--158",

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AU - Bosi, Stefano

AU - Lloyd-Braga, Teresa

AU - Nishimura, Kazuo

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PY - 2021/7

Y1 - 2021/7

N2 - Investments in human capital are individual and collective choices carrying significant external effects. Educated parents and friends accelerate our own human capital accumulation. Skilled colleagues at work increase our own productivity. Sharing experiences with cultured people is gratifying by itself. We introduce human capital externalities in a stylized model à la Uzawa (1965) and we find that growth can be no longer balanced and the equilibrium can be globally indeterminate. Labor supply goes to one and capital reaches an upper ceiling in a finite lapse of time above the initial critical value of labor supply ensuring the balanced growth path. Under a constant tax rate, the government should set a positive rate to speed up human capital accumulation during transition to the capital ceiling.

AB - Investments in human capital are individual and collective choices carrying significant external effects. Educated parents and friends accelerate our own human capital accumulation. Skilled colleagues at work increase our own productivity. Sharing experiences with cultured people is gratifying by itself. We introduce human capital externalities in a stylized model à la Uzawa (1965) and we find that growth can be no longer balanced and the equilibrium can be globally indeterminate. Labor supply goes to one and capital reaches an upper ceiling in a finite lapse of time above the initial critical value of labor supply ensuring the balanced growth path. Under a constant tax rate, the government should set a positive rate to speed up human capital accumulation during transition to the capital ceiling.

KW - Externalities

KW - Growth

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ER -

Externalities of human capital

Abstract

Keywords

UN SDGs

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CUBE: Católica Lisbon Research Unit in Business and Economics

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Externalities of human capital

Abstract

Keywords

UN SDGs

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CUBE: Católica Lisbon Research Unit in Business and Economics

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