Learning for employment, innovating for growth

We present a model in which workers must be educated to get a good job and firms must innovate in order to increase productivity. Education as well as innovation and production require skilled labor as inputs. This, together with the fact that learning opportunities differ across workers, determine simultaneously the long-run level of skilled employment and the long-run ra te of growth. We study the impact of changes in the factors which affect th e education of workers and the incentives to innovate, and discuss the grow th and employment effects of labor market policy measures.