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IQ, Social Mobility and Growth
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
Department of Economics, Universitat Pompeu Fabra (Barcelona, Spain).
1998 (English)Report (Other academic)
Abstract [en]

Intelligent agents may contribute to higher technological growth, if assigned appropriate positions in the economy. These positive effects on growth are unlikely to be internalized ona competitive labor market. The allocation of talent depends on the relative award the market assigns to intelligence versus other individual merits, which will alos influence intergenerational social mobility. To illustrate this, we present an endogenous growth model where each agent can choose to be a worker or an entrepeneur. The reward to entrepeneurs is an endogenous function of the abilities they have been endowed by nature as well as of the amount of knowledge and other social assets they inherit from their parents. When growth is low, the equilibrium in the labor market implies that the reward to entrepeneurs, which will cause low intergenerational social mobility and an inefficient allocation of human resources and, consequently, low growth. On the other hand, there is also a stable equilibrium with high growth  which mitigates the inefficiencies generated by the labor market and implies high intergenerational social mobility.

Place, publisher, year, edition, pages
Stockholm: IIES , 1998. , 29 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 635
Keyword [en]
Intergenerational social mobility, intelligence, growth
National Category
URN: urn:nbn:se:su:diva-40999OAI: diva2:327700
Available from: 2010-06-30 Created: 2010-06-30 Last updated: 2010-07-02Bibliographically approved

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