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Luddites, the industrial revolution, and the demographic transition

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  • Kevin O’Rourke
  • Ahmed Rahman
  • Alan Taylor

Abstract

Technological change was unskilled-labor-biased during the early industrial revolution, but is skill-biased today. This implies a rich set of non-monotonic macroeconomic dynamics which are not embedded in extant unified growth models. We present historical evidence and develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. In a setup with directed technological change, and fixed as well as variable costs of education, initial endowments dictate that the early industrial revolution be unskilled-labor-biased. Increasing basic knowledge then causes a growth takeoff, an income-led demand for fewer but more educated children, and a transition to skill-biased technological change in the long run. Copyright Springer Science+Business Media New York 2013

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  • Kevin O’Rourke & Ahmed Rahman & Alan Taylor, 2013. "Luddites, the industrial revolution, and the demographic transition," Journal of Economic Growth, Springer, vol. 18(4), pages 373-409, December.
    • Handle: RePEc:kap:jecgro:v:18:y:2013:i:4:p:373-409
    DOI: 10.1007/s10887-013-9096-y
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    3. Kevin H. O’Rourke & Ahmed S. Rahman & Alan M. Taylor, 2012. "Trade, Technology and the Great Divergence," Departmental Working Papers 35, United States Naval Academy Department of Economics.
    4. Attar, M. Aykut, 2015. "Entrepreneurship, knowledge, and the industrial revolution," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-54.
    5. Gregor Wolbring & Simerta Gill, 2023. "Occupational Concepts: An Underutilized Resource to Further Disabled People and Others Being Occupied: A Scoping Review," Societies, MDPI, vol. 13(12), pages 1-43, December.
    6. Alexandra de Pleijt & Alessandro Nuvolari & Jacob Weisdorf, 2020. "Human Capital Formation During the First Industrial Revolution: Evidence from the use of Steam Engines," Journal of the European Economic Association, European Economic Association, vol. 18(2), pages 829-889.
    7. Ho, Chi Pui, 2016. "Rise of Women in Unified Growth Theory: French Development Process and Policy Implications," MPRA Paper 73864, University Library of Munich, Germany.
    8. Seth G. Benzell & Laurence J. Kotlikoff & Guillermo LaGarda & Jeffrey D. Sachs, 2015. "Robots Are Us: Some Economics of Human Replacement," NBER Working Papers 20941, National Bureau of Economic Research, Inc.
    9. Emmanuel Bovari & Victor Court, 2019. "Energy, knowledge, and demo-economic development in the long run: a unified growth model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01698755, HAL.
    10. Alexandra M. de Pleijt & Jacob L. Weisdorf, 2017. "Human capital formation from occupations: the ‘deskilling hypothesis’ revisited," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(1), pages 1-30, January.
    11. Antonio Martins-Neto & Nanditha Mathew & Pierre Mohnen & Tania Treibich, 2024. "Is There Job Polarization in Developing Economies? A Review and Outlook," The World Bank Research Observer, World Bank, vol. 39(2), pages 259-288.
    12. Bengtsson, Erik, 2016. "Inequality and the working class in Scandinavia 1800 to 1910 - Workers' share of growing income," Lund Papers in Economic History 142, Lund University, Department of Economic History.
    13. repec:grz:wpsses:2017-02 is not listed on IDEAS
    14. Ahmed S. Rahman, 2017. "Rise of the Machines Redux – Education, Technological Transition and Long-run Growth," Departmental Working Papers 61, United States Naval Academy Department of Economics.
    15. Seth G. Benzell & Laurence J. Kotlikoff & Guillermo LaGarda & Jeffrey D. Sachs, 2015. "Robots Are Us: Some Economics of Human Replacement," NBER Working Papers 20941, National Bureau of Economic Research, Inc.
    16. Guldi, Melanie & Rahman, Ahmed S., 2022. "Little Divergence in America — Market Access and Demographic Transition in the United States," IZA Discussion Papers 15215, Institute of Labor Economics (IZA).
    17. Awaworyi Churchill, Sefa & Inekwe, John & Ivanovski, Kris & Smyth, Russell, 2023. "Human capital and energy consumption: Six centuries of evidence from the United Kingdom," Energy Economics, Elsevier, vol. 117(C).
    18. Fulgence Dominick Waryoba, 2017. "Foreign Direct Investment and China’s Productivity Growth during the 1997 Asian Financial Crisis," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(3), pages 33-37, September.
    19. Feldman, Naomi E. & van der Beek, Karine, 2016. "Skill choice and skill complementarity in eighteenth century England," Explorations in Economic History, Elsevier, vol. 59(C), pages 94-113.

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    More about this item

    Keywords

    Skill bias; Directed technological change; Endogenous growth; Demography; Unified growth theory; O31; O33; J13; J24; N10;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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