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Human Capital as Engine of Growth: The Role of Knowledge Transfers in Promoting Balanced Growth within and across Countries

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  • Isaac Ehrlich

    (Department of Finance, School of Management and Department of Economics, University at Buffalo; National Bureau of Economic Research; and Institute of Labor Economics (IZA). E-mail:)

  • Yun Pei

    (Department of Economics, University at Buffalo. E-mail:)

Abstract

Unlike physical capital, human capital has both embodied and disembodied dimensions. It can be perceived not only as skill and acquired knowledge but also as knowledge spillover effects between overlapping generations and across different skill groups within and across countries. We illustrate the roles these characteristics play in the process of economic development, the relation between income growth and income and fertility distributions, and the relevance of human capital in determining the skill distribution of immigrants in a balanced-growth global equilibrium setting. In all three illustrations, knowledge spillover effects play a key role. The analysis offers new insights for understanding the decline in fertility below the population replacement rate in many developed countries, the evolution of income and fertility distributions across developing and developed countries, and the often asymmetric effects that endogenous immigration flows and their skill composition exert on the long-term net benefits from immigration to natives in source and destination countries.

Suggested Citation

  • Isaac Ehrlich & Yun Pei, 2020. "Human Capital as Engine of Growth: The Role of Knowledge Transfers in Promoting Balanced Growth within and across Countries," Asian Development Review, MIT Press, vol. 37(2), pages 225-263, September.
    • Handle: RePEc:tpr:adbadr:v:37:y:2020:i:2:p:225-263
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/adev_a_00155
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    References listed on IDEAS

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    1. George J. Borjas, 2021. "The Economic Benefits from Immigration," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 13, pages 411-430, World Scientific Publishing Co. Pte. Ltd..
    2. Isaac Ehrlich & Jinyoung Kim, 2007. "The Evolution of Income and Fertility Inequalities over the Course of Economic Development: A Human Capital Perspective," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 137-174.
    3. Isaac Ehrlich & Yong Yin, 2013. "Equilibrium Health Spending and Population Aging in a Model of Endogenous Growth: Will the GDP Share of Health Spending Keep Rising?," Journal of Human Capital, University of Chicago Press, vol. 7(4), pages 411-447.
    4. Isaac Ehrlich & Adam Cook & Yong Yin, 2018. "What Accounts for the US Ascendancy to Economic Superpower by the Early Twentieth Century? The Morrill Act-Human Capital Hypothesis," Journal of Human Capital, University of Chicago Press, vol. 12(2), pages 233-281.
    5. Isaac Ehrlich & Jinyoung Kim, 2007. "Social Security and Demographic Trends: Theory and Evidence from the International Experience," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(1), pages 55-77, January.
    6. Ehrlich, Isaac & Cook, Adam & Yin, Yong, 2018. "What Accounts for the US Ascendancy to Economic Superpower by the Early 20th Century: The Morrill Act – Human Capital Hypothesis," IZA Discussion Papers 11647, Institute of Labor Economics (IZA).
    7. Isaac Ehrlich & Jinyoung Kim, 2015. "Immigration, Human Capital Formation, and Endogenous Economic Growth," Journal of Human Capital, University of Chicago Press, vol. 9(4), pages 518-563.
    8. Erlich, Isaac, 1990. "The Problem of Development: Introduction," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1-11, October.
    9. Tamura, Robert, 1991. "Income Convergence in an Endogenous Growth Model," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 522-540, June.
    10. Ehrlich, Isaac & Kim, Jinyoung, 2005. "Endogenous fertility, mortality and economic growth: Can a Malthusian framework account for the conflicting historical trends in population?," Journal of Asian Economics, Elsevier, vol. 16(5), pages 789-806, October.
    11. Isaac Ehrlich & Kevin M. Murphy, 2007. "Why Does Human Capital Need a Journal?," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 1-7.
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    Cited by:

    1. Sinem Kilic Celik & M. Ayhan Kose & Franziska Ohnsorge, 2023. "Potential Growth Prospects: Risks, Rewards and Policies," CAMA Working Papers 2023-19, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Frederik H. Bennhoff & Jorge Luis García & Duncan Ermini Leaf, 2024. "The Dynastic Benefits of Early-Childhood Education: Participant Benefits and Family Spillovers," Journal of Human Capital, University of Chicago Press, vol. 18(1), pages 44-73.

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    More about this item

    Keywords

    demographic change; economic growth; endogenous immigration; human capital; income distribution;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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