Human Capital Accumulation In Two Sector Endogenous Growth Model: Special Emphasis On Service Good – A Comparative Static Analysis

Abstract

The present paper considers endogenous growth model with commodity sector and service sector. This extension of Lucas model shows that there exists unique steady state growth rate of human capital accumulation which works as the main driving force for the economy as a whole.  On the base of an endogenous growth model, a few the comparative static analysis has been done in this paper. It shows how the share of unskilled labor force, devoted into the commodity sector is influenced by the two factors: the intensity of preference for commodity output and the service output elasticity of skilled labour.