Journal of Economic Growth

, Volume 18, Issue 4, pp 373–409 | Cite as

Luddites, the industrial revolution, and the demographic transition

  • Kevin Hjortshøj O’Rourke
  • Ahmed S. Rahman
  • Alan M. TaylorEmail author


Technological change was unskilled-labor-biased during the early industrial revolution, but is skill-biased today. This implies a rich set of non-monotonic macroeconomic dynamics which are not embedded in extant unified growth models. We present historical evidence and develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. In a setup with directed technological change, and fixed as well as variable costs of education, initial endowments dictate that the early industrial revolution be unskilled-labor-biased. Increasing basic knowledge then causes a growth takeoff, an income-led demand for fewer but more educated children, and a transition to skill-biased technological change in the long run.


Skill bias Directed technological change Endogenous growth Demography Unified growth theory 

JEL Classification

O31 O33 J13 J24 N10 



We acknowledge funding from the European Community’s Sixth Framework Programme through its Marie Curie Research Training Network programme, contract numbers MRTN-CT-2004-512439 and HPRN-CT-2002-00236. We also thank the Center for the Evolution of the Global Economy at the University of California, Davis, for financial support. O’Rourke would like to thank the European Research Council for its financial support, under its Advanced Investigator Grant scheme, contract number 249546. Some of the work on the project was undertaken while O’Rourke was a Government of Ireland Senior Research Fellow and while Taylor was a Guggenheim Fellow; we thank the Irish Research Council for the Humanities and Social Sciences and the John Simon Guggenheim Memorial Foundation for their generous support. For their helpful criticisms and suggestions we thank Gregory Clark, Oded Galor, Philippe Martin, David Mitch, Joel Mokyr, Andrew Mountford, Joachim Voth, two anonymous referees, and participants in workshops at Royal Holloway, University of London; London School of Economics; Universidad Carlos III; University College, Galway; Paris School of Economics; and Brown University; and at the CEPR conferences “Europe’s Growth and Development Experience” held at the University of Warwick, 28–30 October 2005, “Trade, Industrialisation and Development” held at Villa Il Poggiale, San Casciano Val di Pesa (Florence), 27–29 January 2006, and “Economic Growth in the Extremely Long Run” held at the European University Institute, 27 June–1 July, 2006; at the NBER International Trade and Investment program meeting, held at NBER, Palo Alto, Calif., 1–2 December 2006; and at the NBER Evolution of the Global Economy workshop, held at NBER, Cambridge, Mass., 2 March 2007. The latter workshop was supported by NSF grant OISE 05-36900 administered by the NBER. All errors are ours.


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  • Kevin Hjortshøj O’Rourke
    • 1
  • Ahmed S. Rahman
    • 2
  • Alan M. Taylor
    • 3
    Email author
  1. 1.University of Oxford, CEPR, and NBEROxfordUK
  2. 2.United States Naval AcademyAnnapolisUSA
  3. 3.University of California, Davis, NBER, and CEPRDavisUSA

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