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Availability Of Higher Education And Long-Term Economic Growth

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  • RYO HORII
  • AKIOMI KITAGAWA
  • KOICHI FUTAGAMI

Abstract

This paper examines the relationship between the availability of higher education and an economyfs long-term growth rate in a simple endogenous growth model with overlapping generations. Under certain conditions, an increased availability of higher education narrows the rate-of-return difference between human and physical capital investments. This reduces the share of income received by the younger generation, negatively affecting aggregate savings in subsequent periods, and thereby causing a substantial slowdown in the long-term growth rate. Such a paradoxical slowdown is endemic to developed economies, where higher education plays a central role in accumulating human capital. Although the recovery from such a slowdown entails a major restructuring of educational institutions, the authority may not take preventative measures against it, being dazzled by a temporary boom during its early stages.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Article provided by Japanese Economic Association in its journal Japanese Economic Review.

Volume (Year): 59 (2008)
Issue (Month): 2 ()
Pages: 156-177

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Handle: RePEc:bla:jecrev:v:59:y:2008:i:2:p:156-177

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Citations

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Cited by:
  1. Ryo Horii & Koichi Futagami & Akiomi Kitagawa, 2004. "Investment efficiency and intergenerational income distribution: a paradoxical result," Economics Bulletin, AccessEcon, vol. 15(2), pages 1-6.
  2. Aziz, Babar & Khan, Tasneem & Aziz, Shumaila, 2008. "Impact of Higher Education on Economic Growth of Pakistan," MPRA Paper 22912, University Library of Munich, Germany, revised 2008.
  3. repec:ebl:ecbull:v:15:y:2004:i:2:p:1-6 is not listed on IDEAS
  4. Akiomi Kitagawa & Ryo Horii & Koichi Futagami, 2004. "Who Benefits from a Better Education Environment?," Discussion Papers in Economics and Business 04-15, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).

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