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Human capital and growth in japan since 1970: converging to the steady state in a 1% world

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  • Theodore R. Breton

Abstract

Annual growth in GDP/adult in Japan has declined from over 10% in 1969 to an average of 1% since the financial crisis in 1991. I show that a dynamic Solow growth model, augmented with human capital, weekly labor-hours, and oil prices, explains Japan’s annual growth rates from 1969 to 2007 as conditional convergence to a steady-state rate of 1%/year. Each additional year of average adult schooling attainment raised GDP/adult directly and indirectly by 20 percent, and weekly hours worked had an output elasticity of 0.5. The marginal product of schooling was double the marginal product of physical capital.

Suggested Citation

  • Theodore R. Breton, 2014. "Human capital and growth in japan since 1970: converging to the steady state in a 1% world," Documentos de Trabajo de Valor Público 12433, Universidad EAFIT.
    • Handle: RePEc:col:000122:012433
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    More about this item

    Keywords

    Japan; Human Capital; Schooling; Productivity; Economic Growth; Convergence;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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