Grossmann, Volker 2007 This paper compares the positive and normative implications of two alternative measures to promote R&D-based growth: R&D subsidies to firms and publicly provided education targeted to the development of science and engineering (S&E) skills. The model accounts for the specificity of S&E skills, where individuals with heterogeneous ability choose their type of education. Although intertemporal knowledge spillovers are the only R&D externality, the analysis suggests that R&D subsidies may be detrimental to both productivity growth and welfare. Moreover, they raise earnings inequality. In contrast to R&D subsidies, publicly provided education targeted to S&E skills are found to be unambiguously growth-promoting and neutral with respect to the earnings distribution. application/pdf https://folia.unifr.ch/global/documents/323698 https://folia.unifr.ch/documents/323698/files/1-s2.0-s0164070407000274-main.pdf eng info:eu-repo/semantics/altIdentifier/doi/10.1016/j.jmacro.2006.01.001 info:eu-repo/semantics/altIdentifier/issn/0164-0704 info:eu-repo/semantics/openAccess Rights reserved Journal of Macroeconomics. - Elsevier BV. - 2007, vol. 29, no. 4, p. 891-911 Earnings inequality Endogenous growth Public education R&D subsidies S&E skills Economics and Econometrics info:eu-repo/classification/udc/33 How to promote R&D-based growth? Public education expenditure on scientists and engineers versus R&D subsidies http://purl.org/coar/resource_type/c_6501