A BEJM Topics article.

Abstract

We relate the negative correlation between income and the ratio of high to low-tech human capital and the positive correlation between income and investment on R&D, both present in developed countries, to the transition to a services economy. To this end a growth model with endogenous innovation and accumulation of high-tech and low-tech human capital is developed. We consider a negative effect of technological development on the accumulation of high-tech human capital and that services are relatively intensive in low-tech human capital. We confirm the model implications quantitatively in a calibration exercise.

Submitted: July 4, 2005 · Accepted: May 2, 2006 · Published: June 1, 2006

Originally published in Topics in Macroeconomics.

Recommended Citation

Neves Sequeira, Tiago and Reis, Ana B. (2006) "Human Capital Composition, R&D and the Increasing Role of Services," Topics in Macroeconomics: Vol. 6 : Iss. 1, Article 12.
Available at: http://www.bepress.com/bejm/topics/vol6/iss1/art12