Technological change, population dynamics, and natural resource depletion

• Published in: Mathematical social sciences Vol. 71; pp. 122 - 136
• Main Author: Schäfer, Andreas
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.09.2014; NH, Elsevier
• ISSN: 0165-4896; 1879-3118
• DOI: 10.1016/j.mathsocsci.2014.06.001

In this paper, we integrate fertility and educational choices into a scale-invariant model of directed technological change with non-renewable natural resources, in order to reveal the interaction between population dynamics, technological change, and natural resource depletion. In line with empirical regularities, skill-biased technological change induces a decline in population growth and a transitory increase in the depletion rate of natural resources. In the long-run, the depletion rate also declines in the skill intensity. A decline in population growth is harmful for long-run productivity growth, if R&D is subject to diminishing technological opportunities. The effectiveness of economic policies aimed at sustained economic growth thus hinges on its impact on long-run population growth given the sign of intertemporal spillovers in R&D with respect to existing technological knowledge. We demonstrate that an increase in relative research productivities or an education subsidy enhances long-run growth, if R&D is subject to diminishing technological opportunities, while an increase in the teacher–student ratio is preferable in terms of positive intertemporal knowledge spillovers. •Skill-biased technological change reduces population growth.•Skill-biased technological change reduces resource depletion in the long-run.•A decline in population growth may be harmful for long-run productivity growth.•Education subsidies enhance growth under diminishing technological opportunities.•Schooling quality enhances growth under increasing technological opportunities.