IQ, Social Mobility and Growth

• 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.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Intergenerational social mobility

intelligence

growth

Economics

Nationalekonomi

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