This paper answers the following two questions: 1) In the data, do we find a dilution effect of population growth also on per-capita human capital investment? If yes, 2) How can we use this observation to explain theoretically the existence of a differential impact of population change on economic growth across countries? In the first part of the article we document empirically considerable cross-country heterogeneity of a dilution effect of population growth with regards to the process of per-capita human capital formation. And we observe that, depending on the dilution effect observed in a given country, population growth may be relevant — either positively or negatively — for economic growth. In the second part of the paper we use these results to build a multi-sector growth model which, by allowing for a country specific dilution effect of population growth on per-capita human capital formation, is capable of accounting for the non-monotonous correlation between demographic and economic growth rates in the long-run.
Dilution Effects, Population Growth and Economic Growth under Human Capital Accumulation and Endogenous Technological Change / A. Bucci, L. Eraydin, M. Müller. - In: JOURNAL OF MACROECONOMICS. - ISSN 0164-0704. - 62(2019 Dec), pp. 103050.1-103050.18. [10.1016/j.jmacro.2018.08.003]
Dilution Effects, Population Growth and Economic Growth under Human Capital Accumulation and Endogenous Technological Change
A. Bucci;
2019
Abstract
This paper answers the following two questions: 1) In the data, do we find a dilution effect of population growth also on per-capita human capital investment? If yes, 2) How can we use this observation to explain theoretically the existence of a differential impact of population change on economic growth across countries? In the first part of the article we document empirically considerable cross-country heterogeneity of a dilution effect of population growth with regards to the process of per-capita human capital formation. And we observe that, depending on the dilution effect observed in a given country, population growth may be relevant — either positively or negatively — for economic growth. In the second part of the paper we use these results to build a multi-sector growth model which, by allowing for a country specific dilution effect of population growth on per-capita human capital formation, is capable of accounting for the non-monotonous correlation between demographic and economic growth rates in the long-run.File | Dimensione | Formato | |
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