Redistribution and education subsidies are Siamese twins

We develop models of optimal linear and non-linear income taxation with endogenous human capital formation to explore optimal education subsidies. Optimal subsidies on education ensure efficiency in human capital accumulation and thus play an important role in alleviating the tax distortions on learning induced by redistributive policies. If the government cannot verify all investments in human capital, education policy offsets some but not all tax-induced distortions on learning. Non-pecuniary educational costs (benefits) may increase (decrease) subsidies on education, especially if they are complementary to work effort.     

The Transition to Market Economies in an Endogenous Growth Model with Altruistic Agents

This paper considers an endogenous transition from a self-sufficient traditional economy to a market economy and its consequences on fertility and growth. The transition can occur if private intergenerational transfers are unable to secure old-age consumption as adequately as savings on capital markets; otherwise individuals stay in the traditional economy unless the mass-production technology in the market economy is sufficiently more advanced than individually accessible technologies. Markets emerge only if per capita output exceeds a certain level given a fixed cost of forming markets. The transition reduces fertility and promotes growth under plausible restrictions.
JEL Classification : E 20; J 13; O 10     

The Determinants Of The Adoption Of Advanced Manufacturing Technology

The paper investigates empirically the decision of firms to adopt ‘Advanced Manufacturing Technologies’ (AMT) based on a comprehensive specification of a ‘rank model’ of technology adoption using firm-level data for Swiss manufacturing. The explanatory variables include numerous dimensions of (anticipated) benefits from and costs of technology adoption allowing for uncertainty as well as for information and adjustment costs. Moreover, the effect of complementarities between various functional groups of AMT (design, fabrication, communication, etc.) as well as of learning from the use of previous technology vintages within such functional groups is analyzed, Finally, the size-dependence of the adoption decision is studied in detail. The model yields a quite robust pattern of explanation across estimates with different adoption variables (time period of introduction of AMT, intensity of use of AMT, etc.) with plausible differences of the results based on the alternative adoption measures used.     

Climate policies and learning by doing: Impacts and timing of technology subsidies

We study the role of technology subsidies in climate policies, using a simple dynamic equilibrium model with learning by doing. The optimal subsidy rate of a carbon-free technology is high when the technology is first adopted, but falls significantly over the next decades. However, the efficiency costs of uniform instead of optimal subsidies, may be low if there are adjustment costs for a new technology. Finally, supporting existing energy technologies only, may lead to technology lock-in, and the impacts of lock-in increase with the learning potential of new technologies as well as the possibilities for early entry.     

Human Capital,Gender and Organisation in Transition Agriculture: Measuring and Explaining the Technical Efficiency of Bulgarian and Hungarian Farms

Based on survey data on Bulgarian and Hungarian crop and dairy farms, a double-peaked distribution of technical efficiency is observed. Several factors explain differences in efficiency. Human capital matters not only through age and education but also through gender, as farms with a higher proportion of women are more efficient. Contracting with upstream processors increases efficiency through facilitating the adoption of technology and access to credits. The superiority of family farms over corporate farms is confirmed for crops but not for dairy produce.     

Modelling future uptake of solar photo-voltaics and water heaters under different government incentives

To accelerate the adoption of technologies to reduce energy consumption and greenhouse gas (GHG) emissions in the residential sector, government policy makers offer a range of fiscal instruments and incentives. Despite the high costs of these schemes, methods are lagging to systematically evaluate their likely effectiveness amongst a geographical landscape of heterogeneous consumers. To address this need, a model was developed for spatial adoption of technologies such as water heaters and solar photo-voltaic panels (PVs), across housing stock, given government policy incentives. By combining features of choice modelling, Multi-Criteria Analysis (MCA) and diffusion models, it provides a capability to analyse future adoption patterns of the competing technology options under a range of features for purchase timing and choice. The model was implemented across 2.7 million residential dwellings in the State of New South Wales (NSW) of Australia to estimate future stock of PV and water heater options at geographical units of 250 households. Validation against actual numbers of PV installations at each postcode showed the model was effective at identifying high versus low adoption locations. Application to a wide range of policy scenarios, ranging from feed-in tariffs to upfront rebates, showed substantial differences in their effectiveness to accelerate uptake, and the government expenditure required.     

Optimal Taxation of Risky Human Capital*

In a two‐period life‐cycle model with ex ante homogeneous households, earnings risk, and a general earnings function, we derive the optimal linear labor tax rate and optimal linear education subsidies. The optimal income tax trades off social insurance against incentives to work. Education subsidies are not used for social insurance, but they are only targeted at offsetting the distortions of the labor tax and internalizing a fiscal externality. Both optimal education subsidies and tax rates increase if labor and education are more complementary, because education subsidies indirectly lower labor tax distortions by stimulating labor supply. Optimal education subsidies (taxes) also correct non‐tax distortions arising from missing insurance markets. Education subsidies internalize a positive (negative) fiscal externality if there is underinvestment (overinvestment) in education because of risk. Education policy unambiguously allows for more social insurance if education is a risky activity. However, if education hedges against labor‐market risk, optimal tax rates could be lower than in the case without education subsidies.     

Organisational change and the productivity effects of green technology adoption

This study investigates induced productivity effects of firms introducing new environmental technologies. The literature on within-firm organisational change and productivity suggests that firms can achieve higher productivity gains from adopting new technologies if they adapt their organisational structures. Such complementarity effects may be of particular importance for the adoption of greenhouse gas (GHG) abatement technologies. The adoption of these technologies is often induced by public authorities to limit the social costs of climate change, whereas the private returns are much less obvious. This study finds empirical support for complementarity between green technology adoption (either CO₂-reducing or resources and energy efficiency-enhancing technologies) and organisational change. While the sole adoption of green technologies is associated with lower productivity, the simultaneous implementation of green technologies and organisational innovations is not.     

Domestic technology,consumption economies of scale and poverty: evidence from Sri Lanka

While it is well known that new technologies enhance consumer welfare, the manner in which these technologies impact the ability to realize economies of scale in consumption is not well understood. We use Sri Lankan household data to examine how the adoption of new technologies by households positively impacts their ability to achieve household economies of scale. This suggests that new technologies not only deliver a greater variety of consumption goods to consumers, but they may also play an important role in enabling large households to escape poverty by lowering the per-capita costs of maintaining a given standard of living. Given the importance of consumption economies of scale in the measurement of poverty, this study provides some insights on the extent to which the number of poor households changes when food consumption scale economies due to technology adoption in the domestic sphere are incorporated.     

Exploring Links Between Innovation and Diffusion: Adoption of NO<Subscript>X</Subscript> Control Technologies at US Coal-fired Power Plants

While many studies have looked at innovation and adoption of technologies separately, the two processes are linked. Advances (and expected advances) in a single technology should affect both its adoption rate and the adoption of alternative technologies. This paper combines plant-level data on US coal-fired electric power plants with patent data pertaining to NO_X pollution control techniques to study this link. As in other studies of environmental technologies, the effect of other explanatory variables is dominated by the effect of environmental regulations, demonstrating that the mere presence of environmental technologies is not enough to encourage its usage. Nonetheless, I do find that technological advances are important for the adoption of existing combustion modification technologies. However, these advances are less important for the adoption of newer post-combustion control techniques, which are adopted only when needed to comply with the strictest emission limits.     

The welfare implications of advertising and extension under uncertainty

This paper specifies an adoption model based upon Bayesian learning and exogenous information generation. Formulae for welfare effects are derived and calibrated using Green Revolution agricultural data. The effects of intervention through the dissemination of new information are then estimated numerically. The simulations indicate that gains to intervention can be substantial. Intervening with slowly adopted marginal technologies is as beneficial as intervening with superior technologies. Taken from Shampine [Am. J. Agric. Econ. 2 (1998).], which examined intervention in the presence of learning externalities, the results suggest that if adoption is slow, and information is the primary constraint, the gains to intervention are generally substantial relative to the costs.     

A percolation model of eco-innovation diffusion: The relationship between diffusion, learning economies and subsidies

An obstacle to the widespread adoption of environmentally friendly energy technologies such as stationary and mobile fuel cells is their high upfront costs. While much lower prices seem to be attainable in the future due to learning curve cost reductions that increase rapidly with the scale of diffusion of the technology, there is a chicken and egg problem, even when some consumers may be willing to pay more for green technologies. Drawing on recent percolation models of diffusion, we develop a network model of new technology diffusion that combines contagion among consumers with heterogeneity of agent characteristics. Agents adopt when the price falls below their random reservation price drawn from a lognormal distribution, but only when one of their neighbors has already adopted. Combining with a learning curve for the price as a function of the cumulative number of adopters, this may lead to delayed adoption for a certain range of initial conditions. Using agent-based simulations we explore when a limited subsidy policy can trigger diffusion that would otherwise not happen. The introduction of a subsidy policy seems to be highly effective for a given high initial price level only for learning economies in a certain range. Outside this range, the diffusion of a new technology either never takes off despite the subsidies, or the subsidies are unnecessary. Perhaps not coincidentally, this range seems to correspond to the values observed for many successful innovations.     

Low-Growth Equilibrium Accompanied by High Levels of Educational Attainment

The paper demonstrates the low-growth trap associated with high educational attainment in an overlapping-generations model by examining the dual positive effect of senior educated workers in leading-edge technology: on technological progress and on young workers' on-the-job learning. If new technology is sufficiently productive, young workers will demand education to update technology when old, and high technological growth is sustained in the future. Conversely, if new technology is unproductive, they will demand education merely to improve the skills necessary for existing technology, and technological progress will stagnate. Nevertheless, vigorous investment in education occurs since young workers have little hope for on-the-job learning.
JEL Classification Numbers: I20, J24, O33, O40.     

Foreign Aid, Innovation, and Technology Transfer in a North–South Model with Learning-by-Doing

The paper examines foreign aid in the context of a dynamic Ricardian model of trade and development that highlights the role of learning in both the initial adoption of new technologies and products and their eventual transfer from developed to developing countries. When aid is paid as a pure unilateral transfer, the conventional short‐run terms‐of‐trade improvement that results from a home bias in consumption causes harmful delays in the transfer of technology that can lead to mutual immiserization. Conversely, aid that directly or indirectly expedites technology transfer and learning in developing countries can be mutually beneficial.     

Determinants of adoption of Internet in Africa: Case of 17 sub-Saharan countries

This study develops two-level hierarchical model that identifies factors that favor or hamper the use of Internet in Africa. We used data from a survey covering 17 African countries. Our results confirm that urbanization and the spread of Internet infrastructures play an important role in individual decisions to adopt this technology. They also reveal that an individual will have a larger probability to use Internet if he/she has at least completed primary education.Moreover, individual characteristics such as sex, age, level of education, and a social network membership greatly influence Internet adoption. Indeed, men are more likely to use Internet than women; this probability is larger if they are young (16–30 years old) or if they attained at least secondary education level or if they are members of a social network.     

THE PATH OF TECHNOLOGY DIFFUSION: WHICH NEIGHBORS TO LEARN FROM?

This study uses a panel data set of 25 years over 280 districts in rural India and applies a geographic information systems (GIS) program to investigate the regional neighborhood effect on the rate of diffusion of new technologies. The results show that in the technology diffusion process, the early successful adopters have a larger effect on neighboring adopters than do the early unsuccessful adopters. Hence, use of the aggregate or the simple average of adoption rate among neighborhoods as a proxy for the neighborhood effect, a common practice in the learning literature, may be inappropriate. We also find that education and irrigation play important roles in facilitating technology diffusion.     

Conformism and diversity under social learning

Summary. When there are competing technologies or products with unknown payoffs an important question is which technology will prevail and whether technologies with different payoffs can coexist in the long run. In this paper, we use a social learning model with local interactions to study this question. We show that the adoption of technologies as well as the prospects of conformism/diversity depend crucially on the nature of interaction between individuals and the heterogeneity of preferences in a society. Received: May 10, 1999; revised version: February 4, 2000     

Productivity Growth and Organizational Learning

A new specification of the sources of productivity growth is offered. Motivated by the lack of innovation and technology adoption in backward economies, a third channel of growth related to organizational structure, work ethics, and discipline in the production process (for simplicity called organizational learning) is suggested. The suggested specification generates new insights about the dominating source of growth during the development process: organizational learning in backward economies, technology adoption in middle‐income economies, and innovation in developed economies. This adds to the current understanding of development as a transition from technology adoption to innovation. Numerical simulations of the Thai catch‐up process since 1965 illustrate the importance of organizational learning. A counterfactual experiment shows how investments in secondary education contribute to the move from organizational learning to adoption of more advanced foreign technology.     

The adoption of new technology by the farmers in Taiwan

This study addresses the technologies the farmers adopted, their reasons for adopting these technologies and the result of adopting these technologies. The design and strategy used to collect the data needed are both qualitative and quantitative. Farmers who practised traditional farming methods and those who adopted the new technologies were both given survey questionnaires and were interviewed.

The result of the study shows that the technologies applied by the farmers are the use of tractors in tilling the ground, the use of machinery in planting, the practice of irrigation and the use of a combination of organic and commercial fertilizers. The reasons for the adoption of the latter are the availability of chemicals and the convenience of their use, and this is used to enhance the growth of plants. The results of the new technology adoption are high yields of produce, production of hybrid crops, and the saving of labour, thus increasing the income of the farmers.     

Policy choice for end-of-pipe abatement technology adoption under technological uncertainty

Regulators have increasingly become concerned about end-of-pipe abatement technologies because they not only play a crucial role in air pollution control but also ensure the achievement of the deep carbon emissions reduction target. This paper investigates the effect of emission taxes and standards on the adoption of end-of-pipe abatement technology when the arrival time and degree of improvement of the new emissions abatement technology are uncertain. We find that the ranking of emission taxes and standards in terms of motivating early adoption depends on the policy stringency. More specifically, for high levels of environmental stringency, standards induce an earlier technology adoption than taxes, while the opposite conclusion holds for low levels of environmental stringency. The sensitivity analysis shows that these findings are robust to various relevant crucial parameters. Finally, the implications for the choice of environmental policy have been provided.