Availability of Higher Education and Long-Term Economic Growth*

22 Pages Posted: 23 Apr 2008

See all articles by Ryo Horii

Ryo Horii

Osaka University - Institute of Social and Economic Research

Akiomi Kitagawa

Yokohama City University - Department of Commerce

Koichi Futagami

Osaka University - School of Economics

Date Written: 2006-05-22

Abstract

In the present paper, we examine the economic growth effects of a limited availability of higher education in a simple endogenous growth model with overlapping generations. It is shown that this limited availability might promote economic growth by increasing aggregate savings. If the supply of human capital is restricted, its price remains high and a large share of aggregate output is distributed to young households, which need to save for their old age. When this growth-enhancing effect is strong enough, an excessive increase in availability leads to a shortage of investable funds, which substantially reduces economic growth.

Suggested Citation

Horii, Ryo and Kitagawa, Akiomi and Futagami, Koichi, Availability of Higher Education and Long-Term Economic Growth* (2006-05-22). Japanese Economic Review, Vol. 59, Issue 2, pp. 156-177, June 2008. Available at SSRN: https://ssrn.com/abstract=1124176 or http://dx.doi.org/10.1111/j.1468-5876.2007.00403.x

Ryo Horii (Contact Author)

Osaka University - Institute of Social and Economic Research ( email )

1-1 Yamadaoka
Suita, Osaka 565-0871
Japan
+81 6 6879 8552 (Phone)
+81 6 6879 8583 (Fax)

HOME PAGE: http://econ.jpn.org/horii/

Akiomi Kitagawa

Yokohama City University - Department of Commerce ( email )

Yokohama
Japan

Koichi Futagami

Osaka University - School of Economics ( email )

1-7 Machikaneyama
Toyonaka
Osaka 560
Japan

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