Figure 3. Transitional dynamics

Share of G in high-tech

Skilled employment in efficiency units: h

Difficulty index in high-tech: X2

Innovation arrival rate in high-tech: I2

Unskilled employment in efficiency units: m

Difficulty index in low-tech: X1
0.111----------------------.----------------------.----------------------.----------------------
0.105---------------------■
0.1 ∙ -
0.0951----------------'----------------'----------------'----------------
0 100 200 300 400

Relative employment of unskilled workers: θ


Average skill premium

Note: the dotted lines represent the initial position of the economy
30
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