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Education and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth

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  • Verbic, Miroslav
  • Majcen, Boris
  • Cok, Mitja

Abstract

In the article we model education and human capital as major endogenous growth elements in a small open economy general equilibrium framework and consider several policy scenarios for Slovenia. Decrease of the PIT rate and increase of government spending on education turned out to be the most effective policy measures. It is important, though, to understand its transitory dynamic. Namely, as education expenditure is increased, certain amount of labour is temporarily withdrawn from its productive use and put into the educational system. Higher skill upgrade of labour requires longer and higher short-term labour force decrease, but also provides us with higher long-term growth. The households that would gain more utility from such policy scenarios are those with more skilled labour and thus higher income level.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17817.

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Date of creation: 2009
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Handle: RePEc:pra:mprapa:17817

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Keywords: education; endogenous growth; general equilibrium modelling; Slovenia;

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Cited by:
  1. Miroslav Verbič & Boris Majcen & Olga Ivanova & Mitja Čok, 2011. "R&D and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(1), pages 67-89, March.

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