Schumpeterian Growth Theory and the Dynamics of Income Inequality

By Philippe Aghion. 2002

312 citations recorded by the source corpus.

In this lecture, it is argued that Schumpeterian Growth Theory, in which growth is driven by a sequence of quality-improving innovations, can shed light on two important puzzles raised by the recent evolution of wage inequality in developed economies. The first puzzle concerns wage inequality between educational groups, which has substantially risen in the US and the UK during the past two decades following a sharp increase in the supply of educated labor. The second puzzle concerns wage inequality within educational groups, which accounts for a large fraction of the observed increase in wage inequality, although in contrast to between-group wage inequality it has mainly affected the temporary component of income.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/434a1bf3c4aff806e12e591617c83c5a6135fea0

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Citations in the corpus

Income Inequality in OECD Countries: Data and Explanations (2003, unknown): “It has revived interest in the vintage nature of capital (Salter, 1960) and the extent to which it can explain rising inequality within groups (Aghion, 2002).”
Climate change, innovation and jobs (2008, background): “This process, which may take place over a long period of time, will increase the demand for (skilled) labour (Aghion, 2001).”
Insurance and Opportunities: A Welfare Analysis of Labor Market Risk (2008, background): “2For surveys on the causes of the changes in inequality, see Katz and Autor (1999), Acemoglu (2002), Aghion (2002), and Hornstein, Krusell and Violante (2005).”
The Effects of Technical Change on Labor Market Inequalities (2004, unknown): “Finally, as emphasized in Aghion (2002), this approach can explain why within-group inequality anticipated the jump in the college premium by roughly a decade.”
The Effect of Consumption and Production Structure on Growth and Distribution: A Micro to Macro Model (2010, unknown): “The more recent empirical literature (for a review see Aghion, 2002), however, shows that earnings distribution is more complex than reproduction of education level distribution, with inequalities appearing also within educational classes.”
Skill-Biased Technical Change (2008, background): “ae ; ( 3 ) where Ks denotes structures capital, and Ke equipment capital.”