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Availability of Higher Education and Long-Term Economic Growth

  • Ryo Horii

    (Osaka University)

  • Akiomi Kitagawa

    (Tohoku University)

  • Koichi Futagami

    (Osaka University)

This paper examines the economic growth effects of limited availability of higher education in a simple endogenous growth model with overlapping generations. With limited availability, the scarcity of human capital keeps its price high and distributes a larger share of the aggregate output to young households. Under certain conditions, it leads to greater aggregate savings in each period, thereby enabling the economy to grow faster than without any limitation. In such cases, an excessive expansion in the availability causes a temporary boom followed by a serious deficiency in investible funds, resulting in a substantial slowdown in economic growth.

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File URL: http://econwpa.repec.org/eps/dev/papers/0504/0504005.pdf
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Paper provided by EconWPA in its series Development and Comp Systems with number 0504005.

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Length: 37 pages
Date of creation: 12 Apr 2005
Date of revision: 08 Sep 2005
Handle: RePEc:wpa:wuwpdc:0504005
Note: Type of Document - pdf; pages: 37
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
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  10. De Gregorio, Jose & Kim, Se-Jik, 2000. "Credit Markets with Differences in Abilities: Education, Distribution, and Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(3), pages 579-607, August.
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  19. repec:cup:cbooks:9780521001151 is not listed on IDEAS
  20. Pritchett, Lant, 1996. "Where has all the education gone?," Policy Research Working Paper Series 1581, The World Bank.
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