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Education, structural change and economic development

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  • Pier-Paolo Saviotti

    (Faculty of Geosciences, Utrecht University - Faculty of Geosciences, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur)

  • Andreas Pyka

    (University of Hohenheim)

  • Bogang Jun

    (University of Hohenheim)

Abstract

In this paper we explore the role that can be played by education in economic development using a model called TEVECON. Within the population of our economic system we distinguish two different social classes which differ for their level and quality of education and, as a consequence, for their human capital, wages and income per head. We vary the investment in education as a share of total investment, the share of investment in education allocated to each social class, and the quality of education each class receives. We show that while education can exert a positive effect on social mobility by increasing the population share of the upper social class it also leads to a tradeoff between income inequality and the rate of growth of income. These results are obtained based only on education and do not take into account any wealth effects.

Suggested Citation

  • Pier-Paolo Saviotti & Andreas Pyka & Bogang Jun, 2016. "Education, structural change and economic development," Post-Print hal-02097591, HAL.
  • Handle: RePEc:hal:journl:hal-02097591
    DOI: 10.1016/j.strueco.2016.04.002
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