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2 edition of When does labor scarcity encourage innovation? found in the catalog.

When does labor scarcity encourage innovation?

by Daron Acemoglu

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Published by Massachusetts Institute of Technology, Dept. of Economics in Cambridge, MA .
Written in English


About the Edition

This paper studies the conditions under which the scarcity of a factor (in particular, labor) encourages technological progress and technology adoption. In standard endogenous growth models, which feature a strong scale effect, an increase in the supply of labor encourages technological progress. In contrast, the famous Habakkuk hypothesis in economic history claims that technological progress was more rapid in 19th-century United States than in Britain because of labor scarcity in the former country. Similar ideas are often suggested as possible reasons for why high wages might have encouraged rapid adoption of certain technologies in continental Europe over the past several decades, and as a potential reason for why environmental regulations can spur more rapid innovation. I present a general framework for the analysis of these questions. I define technology as strongly labor saving if the aggregate production function of the economy exhibits decreasing differences in the appropriate index of technology, theta, and labor. Conversely, technology is strongly labor complementary if the production function exhibits increasing differences in theta and labor. The main result of the paper shows that labor scarcity will encourage technological advances if technology is strongly labor saving. In contrast, labor scarcity will discourage technological advances if technology is strongly labor complementary. I provide examples of environments in which technology can be strongly labor saving and also show that such a result is not possible in certain canonical macroeconomic models. These results clarify the conditions under which labor scarcity and high wages encourage technological advances and the reason why such results were obtained or conjectured in certain settings, but do not always apply in many models used in the growth literature. Keywords: Habakkuk hypothesis, high wages, innovation, labor scarcity, technological change. JEL Classifications: O30, O31, O33, C65.

Edition Notes

StatementDaron Acemoglu
SeriesWorking paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 09-07, Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 09-07.
ContributionsMassachusetts Institute of Technology. Dept. of Economics
The Physical Object
Pagination37 p. :
Number of Pages37
ID Numbers
Open LibraryOL24647017M
OCLC/WorldCa671763306

labor scarcity as an important economic channel. Conjectured by our theoretical model, labor scarcity drives producers’ demand for labor-saving technology and strengthens the causal impact of nance on innovation. To test this hypothesis, we rst take advantage of the sharp di erences in labor scarcity between the free and slave states. Book Description. Principles of Microeconomics: Scarcity and Social Provisioning takes a pluralistic approach to the standard topics of an introductory microeconomics course. The text builds on the chiefly neoclassical material of the OpenStax Principles of Economics text, adding extensive content from heterodox economic by:

  But even with this renewed attention to innovation, some managers keep projects resource-starved, in the belief that scarcity drives creative . Labor — Correct. In the simple circular flow model, all labor is owned by households. They offer their labor services to business in return for income (wages and salaries), which is then used to buy the goods and services made by the businesses.

When Does Labor Scarcity Encourage Innovation? CEPR Discussion Papers, C.E.P.R. Discussion Papers View citations (15) Also in NBER Working Papers, National Bureau of Economic Research, Inc () View citations (17) See also Journal Article in Journal of Political Economy () A Theory of Military Dictatorships.   Scarcity of resources, scarcity of political consensus and scarcity of financing for innovation. These are some of the major challenges faced by companies in today’s global environment. That’s according to Leif Beck Fallesen, editor-in-chief and CEO of the Danish publication Dagbladet Borsen. Fallesen was the moderator of the first plenary session at the INSEAD Leadership.


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When does labor scarcity encourage innovation? by Daron Acemoglu Download PDF EPUB FB2

When Does Labor Scarcity Encourage Innovation. Daron Acemoglu NBER Working Paper No. March JEL No. C65,O30,O31,O33 ABSTRACT This paper studies the conditions under which the scarcity of a factor (in particular, labor) encourages.

When Does Labor Scarcity Encourage Innovation. Daron Acemoglu Massachusetts Institute of Technology This paper studies whether labor scarcity encourages technological advances, that is, technology adoption or innovation, for example, as claimed by Habakkuk in the context of nineteenth-century United States.

Downloadable (with restrictions). This paper studies the conditions under which the scarcity of a factor (in particular, labor) encourages technological progress and technology adoption.

In standard endogenous growth models, which feature a strong scale effect, an increase in the supply of labor encourages technological progress. In contrast, the famous Habakkuk hypothesis in economic history.

This paper studies whether labor scarcity encourages technological advances, that is, technology adoption or innovation, for example, as claimed by Habakkuk in the context of nineteenth-century.

When Does Labor Scarcity Encourage Innovation. Daron Acemoglu. NBER Working Paper No. Issued in March NBER Program(s):Labor Studies This paper studies the conditions under which the scarcity of a factor (in particular, labor) encourages technological progress and technology adoption.

The main result of the paper shows that labor scarcity will encourage technological advances if technology is strongly labor saving. In contrast, labor scarcity will discourage technological advances if technology is strongly labor complementary.

Acemoglu, Daron, When Does Labor Scarcity Encourage Innovation. (Ma ). MIT Cited by: morerapidtechnologicalprogress,andeitherincreasethegrowthrate(inthefirst-generation models,suchasRomer,Segerstrom,AnantandDinopoulos,Aghionand Howitt. Get this from a library. When When does labor scarcity encourage innovation?

book labor scarcity encourage innovation?. [Daron Acemoglu; National Bureau of Economic Research.] -- This paper studies the conditions under which the scarcity of a factor (in particular, labor) encourages technological progress and technology adoption. In standard endogenous growth models, which.

This paper studies whether labor scarcity encourages technological advances, that is, technology adoption or innovation, for example, as claimed by Habakkuk in the context of nineteenth-century United States. I define technology as strongly labor saving if technological advances reduce the marginal product of labor and as strongly labor complementary if they increase by: Downloadable (with restrictions).

Author(s): Daron Acemoglu. Abstract: This paper studies whether labor scarcity encourages technological advances, that is, technology adoption or innovation, for example, as claimed by Habakkuk in the context of nineteenth-century United States.

I define technology as strongly labor saving if technological advances reduce the marginal product of labor and. When Does Labor Scarcity Encourage Innovation. Strongly Labor Saving Technological Progress Daron Acemoglu Massachusetts Institute of Technology October Abstract This paper studies the conditions under which the scarcity of a factor (in particular, labor) encourages technological progress and technology adoption.

In standard endogenous growth. Facing scarcity of a production factor, a firm can develop technologies to either substitute the scarce factor (price effect) or complement the more abundant factors (market size effect).

Does female labor scarcity encourage innovation?. Experimentation, Patents and Innovation Daron Acemoglu Kostas Bimpikis Asuman Ozdaglar American Economic Journal: Microeconomics, 3(1), pp. January When Does Labor Scarcity Encourage Innovation.

Daron Acemoglu Journal of Political Economy, (6), pp. December Spread of (Mis)Information in Social Networks Daron. Explaining the first Industrial Revolution: two views - Volume 15 Issue 1 - NICHOLAS CRAFTS Skip to main content Accessibility help We use cookies to distinguish you from other users and to provide you with a better experience on our by:   Abstract.

We examine the causal effect of unionization on firm innovation. To establish causality, we use a regression discontinuity design relying on “locally” exogenous variation generated by elections that pass or fail by a small margin of by: This is “Confronting Scarcity: Choices in Production”, chapter 2 from the book The negative slope of the production possibilities curve reflects the scarcity of the plant’s capital and labor.

Producing more snowboards requires shifting resources out of ski production and thus producing fewer skis. and labor and about 35% from. The actual fundamental problem, of course, is a scarcity of labor and thus how to raise the productivity of labor.) The next chapter provides a conclusive demonstration of the limitless potential of natural resources and contains a necessary critique of the objections of.

Does female labor scarcity encourage innovation?: Evidence from China’s gender imbalance. Facing scarcity of a production factor, a firm can develop technologies to either substitute the scarce factor (price effect) or complement the more abundant factors (market size effect).

Start studying Econ Final. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Search. labor and capital D. Wages, salaries, and profits. Land, labor and capital D.

Support entrepreneurs to encourage innovation. C> Protect property rights and enforce contracts. It is not because we could not learn. Rather, we do not have to.

The reason why is something called the division and specialization of labor, a production innovation first put forth by Adam Smith, Figure 2, in his book, The Wealth of Nations. Figure 2. Adam Smith. Adam Smith introduced the idea of dividing labor into discrete : Erik Dean, Justin Elardo, Mitch Green, Benjamin Wilson, Sebastian Berger.

Because people live in a world of scarcity, they cannot have all the time, money, possessions, and experiences they wish. Neither can society. This chapter will continue our discussion of scarcity and the economic way of thinking by first introducing three critical concepts: opportunity cost, marginal decision making, and diminishing returns.labor scarcity channel.

Following our theoretical model, labor scarcity spurs demand for in-novation and strengthens the positive relation between nance and innovation. To test this hypothesis, we rst take advantage of the sharp di erence in labor scarcity between the free and slave states.The first column of Table shows the sources of total U.S.

spending on research and development. The second column shows the total dollars of R&D funding by each source. The third column shows that, relative to the total amount of funding, % comes from the federal government, about 69% of R&D is done by industry, and less than 4% is done by universities and colleges.