Technological Progress, Mobility, and Economic Growth

Oded Galor, Daniel Tsiddon

Research output: Contribution to journalArticlepeer-review

Abstract

This paper analyzes the relationship between technological progress, wage inequality, intergenerational earnings mobility, and economic growth. In periods of major technological inventions, a decline in the relative importance of initial conditions raises inequality, enhances mobility, and generates a larger concentration of high-ability individuals in technologically advanced sectors, stimulating future technological progress and growth. However, once technologies become more accessible, mobility is diminished and inequality decreases but becomes more persistent. The reduction in the concentration of ability in technologically advanced sectors diminishes the likelihood of technological breakthroughs and slows future growth. User friendliness, therefore, becomes unfriendly to future economic growth.

Original languageEnglish
Pages (from-to)363-382
Number of pages20
JournalAmerican Economic Review
Volume87
Issue number3
StatePublished - Jun 1997

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