Availability of Higher Education and Long-Term Economic Growth
AbstractThis 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.
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 03-14.
Length: 37 pages
Date of creation: Nov 2003
Date of revision:
Other versions of this item:
- Ryo Horii & Akiomi Kitagawa & Koichi Futagami, 2008. "Availability Of Higher Education And Long-Term Economic Growth," The Japanese Economic Review, Japanese Economic Association, vol. 59(2), pages 156-177.
- Ryo Horii & Akiomi Kitagawa & Koichi Futagami, 2003. "Availability of Higher Education and Long-Term Economic Growth," Discussion Papers in Economics and Business 03-14-Rev, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Sep 2005.
- Ryo Horii & Akiomi Kitagawa & Koichi Futagami, 2005. "Availability of Higher Education and Long-Term Economic Growth," Development and Comp Systems 0504005, EconWPA, revised 08 Sep 2005.
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-07-11 (All new papers)
- NEP-DEV-2005-07-11 (Development)
- NEP-EDU-2005-07-11 (Education)
- NEP-SEA-2005-07-11 (South East Asia)
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