Human Capital and Over-investment in R&D

19 Pages Posted: 20 Nov 2007

See all articles by Ana Balcão Reis

Ana Balcão Reis

New University of Lisbon - Faculdade de Economia

Tiago Neves Sequeira

University of the Interior of Beira - Faculty of Social Sciences and Humanities; New University of Lisbon - Faculdade de Economia

Abstract

We introduce a negative effect of technological development on human capital accumulation in a growth model with endogenous innovation and accumulation of human capital. This implies a negative externality of R&D in human capital accumulation. Some calibration exercises suggest that this distortion may be sufficiently strong not only to offset the usual effects of spillovers and of returns to specialization but also to induce over-investment in R&D.

Suggested Citation

Reis, Ana Balcao and Neves Sequeira, Tiago, Human Capital and Over-investment in R&D. Scandinavian Journal of Economics, Vol. 109, No. 3, pp. 573-591, September 2007, Available at SSRN: https://ssrn.com/abstract=1031541 or http://dx.doi.org/10.1111/j.1467-9442.2007.00508.x

Ana Balcao Reis (Contact Author)

New University of Lisbon - Faculdade de Economia ( email )

Campus de Campolide
Lisboa, 1099-032
Portugal

Tiago Neves Sequeira

University of the Interior of Beira - Faculty of Social Sciences and Humanities ( email )

6200-209 Covilha
Portugal

New University of Lisbon - Faculdade de Economia ( email )

Campus de Campolide
Lisboa, 1099-032
Portugal

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