Essays on technology adoption and economic growth

The U.S. economy has experienced a substantial change in wage distribution over the past several decades. Chapter II provides a simple stylized growth model characterized by technology adoption to account for how new technologies can cause changes in wage distribution and wage inequality. Heterogeneous ability across workers and existence of technology adoption costs play key roles in the process. When adoption costs exist, individual workers decide which technology to adopt to earn the highest returns given economic environment, and their aggregate decisions determine the overall economy's environment for technology adoption for the next generation of workers. This chapter argues that during the transitional period, a technological bias towards high ability rises and the observed wage inequality emerges.; According to the standard economic theory, capital must flow from rich to poor countries and their incomes must converge fast. However, we observe persistent income disparity across countries. Chapter III develops a model to explain the existence of cross-country income disparity by extending the theoretical model in the previous chapter. An important feature is that technology adoption requires an appropriate combination of inputs, human capital and physical capital. Due to the nature of appropriate technology, not every country adopts a new technology, and in the process of technology adoption, capital flows in the opposite direction to what the standard economic theory predicts, which hinders cross-country income convergence.; Chapter IV examines the effect of technology adoption on the wage dispersion in the U.S. manufacturing sector using the quantile regression method. We obtain two main results. First, during the period of 1970 to 1995, the marginal effect of capital intensity on wage has risen. Second, the marginal effect on high wage quantiles has risen more than that on low wage quantiles. These results suggest that (1) the manufacturing industries have continued to adopt new technologies, (2) high wage quantile and high capital intensity industries have adopted technologies more actively than others, and (3) those industries have contributed to the widening of wage dispersion over the period.