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Advisor(s)
Abstract(s)
Europe's “2020 Strategy” has the main goal of stimulating economic growth by increasing the weight of the high-tech sector and the share of high-skilled workers. However, cross-country European data is at odds with that strategy: the relationship between economic growth and both the technology structure and the skill structure is statistically insignificant, although the last two are positively related. We investigate an analytical mechanism that connects these facts by extending a directed technical change growth model in several directions. We take the model to the data by calibrating it after the estimation of key structural relationships with cross-country data. When we allow for high relative barriers to entry into the high-tech sector and scale effects on growth we are able to replicate the empirical relationships. We derive quantitative policy implications on the effects of education policy on economic growth when leveraged by industrial policy aiming to reduce barriers to entry into the high-tech sector.
Description
Keywords
Growth High Skilled High Tech Scale Effects
Pedagogical Context
Citation
Gil, Pedro Mazeda; Oscar Afonso and Paulo Brito .(2016). “Economic growth, the high-tech sector, and the high skilled: theory and quantitative implications”. Gabinete de Estratégia e Estudos - GEE Papers Nº 55, Março de 2016. (Search PDF in 2024).
Publisher
GEE - Gabinete de Estratégia e Estudos | Ministério da Economia