TY  - JOUR
AU  - Kremer,Michael
AU  - Thomson,Jim
TI  - Young Workers, Old Workers, and Convergence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4827
PY  - 1994
Y2  - August 1994
UR  - http://www.nber.org/papers/w4827
L1  - http://www.nber.org/papers/w4827.pdf
N1  - Author contact info:
Michael Kremer
Harvard University
Department of Economics
Littauer Center M20
Cambridge, MA 02138
Tel: 617/495-9145
Fax: 617/495-7730
E-Mail: mkremer@fas.harvard.edu
AB  - The human capital of young and old workers are imperfect substitutes both in production and in on-the-job training.  This helps explain why capital does not flow from rich to poor countries, causing instantaneous convergence of per capita output.  If each generation chooses its human capital optimally given that of the previous and succeeding generations, human capital follows a unique rational- expectations path.  For moderate substitutability, human capital within each sector oscillates relative to that in other sectors, but aggregate human capital converges to the steady state monotonically, at rates consistent with those observed empirically.
ER  -