Externalities of human capital

Investments in human capital are individual and collective choices carrying significant external effects. Educated parents friends accelerate our own accumulation. Skilled colleagues at work increase productivity. Sharing experiences with cultured people is gratifying by itself. We introduce externalities a stylized model à la Uzawa (1965) we find that growth can be no longer balanced the equilibrium globally indeterminate. Labor supply goes to one reaches an upper ceiling finite lapse of time above initial critical value labor ensuring path. Under constant tax rate, government should set positive rate speed up accumulation during transition ceiling. • close (1965). Growth Outside BGP,