n African Journal of Science, Technology, Innovation and Development - Human capital, R&D and endogenous occupational choice

Volume 2, Issue 2
  • ISSN : 2042-1338
  • E-ISSN: 2042-1346
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The paper explores the interaction between capital markets imperfections and the agents' occupations in a technologically non-advanced country. We then build a two-period overlapping-generations growth model with heterogeneous agents. We suppose that agents inherit ability and a technique of production from their parents. We show that when information in the capital markets is imperfect the occupational choices of agents are endogenous. We also find that there are two endogenous thresholds of ability which allow distinguishing lenders, R&D innovators and implementers who produce intermediate goods with lagged productivity. Finally, the growth rate and convergence depend both on the level and the structure of human capital. Capital markets influence economic growth and convergence through technology.

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