Endogenizing Growth Via A Lag For Apprenticing

We take up a growth model with both skilled and unskilled labor, and a steady migration of some unskilled workers, who undertake apprenticing, to the skilled group of workers. Apprenticing involves a period of observing and thus labor output foregone. The time-out for observing represents a cost to the economy and this results in the rate of balanced growth being endogenous. We examine the balanced growth path and report on the stability of our dynamic system.