Abstract
This paper models growth via on-the-job learning when firms and workers are heterogeneous. It is an overlapping generations model in which young agents match with the old. More efficient assignments lead to faster long-run growth, more inequality, and less turnover in the distribution of human capital. Constant-growth paths are characterized for general functional forms and then, for the Cobb-Douglas case, the transition dynamics are solved analytically when the skill of the young is log-normally distributed and the initial human capital of the old generation is also log-normal. Growth and inequality move together on the transition to the balanced growth path.
Original language | English (US) |
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Pages (from-to) | 1149-1171 |
Number of pages | 23 |
Journal | American Economic Review |
Volume | 104 |
Issue number | 4 |
DOIs | |
State | Published - Apr 2014 |
ASJC Scopus subject areas
- Economics and Econometrics