NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Luddites and the Demographic Transition

Kevin H. O'Rourke, Ahmed S. Rahman, Alan M. Taylor

NBER Working Paper No. 14484
Issued in November 2008
NBER Program(s):   DAE

Technological change was unskilled-labor-biased during the early Industrial Revolution, but is skill-biased today. This is not embedded in extant unified growth models. We develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. Endowments dictate that the early Industrial Revolution be unskilled-labor-biased. Increasing basic knowledge causes a growth takeoff, an income-led demand for fewer educated children, and the transition to skill-biased technological change. The simulated model tracks British industrialization in the 18th and 19th centuries and generates a demographic transition without relying on either rising skill premia or exogenous educational supply shocks.

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Document Object Identifier (DOI): 10.3386/w14484

Published: Journal of Economic Growth December 2013, Volume 18, Issue 4, pp 373-409 Luddites, the industrial revolution, and the demographic transition Kevin Hjortshøj O’Rourke, Ahmed S. Rahman, Alan M. Taylor

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