Creative capital accumulation and the advancement of India's creative economy

Abstract

Despite the relevance of Richard Florida's ideas about the role of creative capital in promoting the creative economy of developing nations like India, there is no theoretical research on these topics in the extant literature. Therefore, we focus on an arbitrary region in a developing country like India and then analyze the creative capital accumulation decision faced by workers in this region who aspire to membership in the so-called creative class. Specifically, we compute the present discounted value of a worker's lifetime earnings as a function of the primitives of the problem. Next, we solve for the level of education that maximizes the lifetime earnings function. Finally, we describe how this optimal level of education is affected by changes in the lifespan of workers, the interest rate, and by the growth rate of the wage function.