Vintage Human Capital, Growth, and the Diffusion of New Technology

Abstract

We develop a model of vintage human capital in which each technology requires vintage-specific skills. We examine the properties of a stationary equilibrium for our economy. The stationary equilibrium is characterized by an endogenous distribution of skilled workers across vintages. The distribution is shown to be single-peaked. Under general conditions, there is a lag between the appearance of a technology and its peak usage, a phenomenon known as diffusion. An increase in the rate of exogenous technological change shifts the distribution of human capital to more recent vintages, thereby increasing the diffusion rate.