TECHNOLOGICAL-PROGRESS, MOBILITY, AND ECONOMIC-GROWTH

This paper analyzes the relationship between technological progress, w age inequality, intergenerational earnings mobility, and economic grow th. In periods of major technological inventions, a decline in the rel ative importance of initial conditions raises inequality, enhances mob ility, and generates a larger concentration of high-ability individual s in technologically advanced sectors, stimulating future technologica l progress and growth. However, once technologies become more accessib le, mobility is diminished and inequality decreases bur becomes more p ersistent. The reduction in the concentration of ability in technologi cally advanced sectors diminishes the likelihood of technological brea kthroughs and slows future growth. User friendliness, therefore, becom es unfriendly to future economic growth. (JEL D31, J31, J62, 040)