Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
966263 | Journal of Macroeconomics | 2007 | 21 Pages |
Abstract
This paper compares the positive and normative implications of two alternative measures to promote R&D-based growth: R&D subsidies to firms and publicly provided education targeted to the development of science and engineering (S&E) skills. The model accounts for the specificity of S&E skills, where individuals with heterogeneous ability choose their type of education. Although intertemporal knowledge spillovers are the only R&D externality, the analysis suggests that R&D subsidies may be detrimental to both productivity growth and welfare. Moreover, they raise earnings inequality. In contrast to R&D subsidies, publicly provided education targeted to S&E skills are found to be unambiguously growth-promoting and neutral with respect to the earnings distribution.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Volker Grossmann,