Natural Selection and Innovation-Driven Growth

Chu, Angus and Cozzi, Guido and Fan, Haichao (2022): Natural Selection and Innovation-Driven Growth.

Abstract

This study develops an innovation-driven growth model with natural selection of heterogeneous households, which differ in their ability to accumulate human capital. In an early stage of development, households with lower education ability accumulate less human capital but choose to have more children and enjoy an evolutionary advantage. In a later stage of development, households with high education ability increase their number of children as their human capital rises over time. In the long run, all households choose the same steady-state fertility rate. Therefore, households' population share and human capital converge to stationary distributions. However, the temporary evolutionary disadvantage of high-ability households has a lasting negative impact on long-run growth. Finally, we show that the negative effects of this natural selection can be captured by heterogeneity in education and provide empirical evidence that heterogeneity in education indeed has adverse effects on education, innovation and economic growth in the long run.

• Item Type: MPRA Paper
• Language: English
• Keywords: natural selection; innovation; economic development
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity

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