Demographic Change, Human Capital, and Economic Growth in Korea

37 Pages Posted: 14 Jun 2019

See all articles by Jong-Suk Han

Jong-Suk Han

Korea Institute of Public Finance

Jong‐Wha Lee

Korea University

Date Written: June 14, 2019


In this study, we construct a measure of human capital using micro datasets on labor composition of age, gender, education, and wage rate and analyze its role in economic growth for the Korean economy. Over the past three decades, human capital has grown steadily at about 1% per year, contrasting to a continuously declining trend of total work-hours. This growth has been driven by the rise of better-educated baby boom cohorts. A growth accounting exercise shows that human capital contributes significantly to economic growth; it accounted for 0.5% points of annual GDP growth over the period. Human capital is projected to remain a major growth factor over the next two decades as the increase in educational attainment continues. Increased employment rate of elderly or female workers reduces the aggregate human capital growth while increasing the available labor. Polices to improve human capital of less-productivity workers will help to support aggregate human capital and economic growth.

Keywords: Aging, Demographic change, Education, Human capital, Growth, Training

JEL Classification: I25, J24, O47, O53

Suggested Citation

Han, Jong-Suk and Lee, Jong‐Wha, Demographic Change, Human Capital, and Economic Growth in Korea (June 14, 2019). CAMA Working Paper No. 39/2019. Available at SSRN: or

Jong-Suk Han

Korea Institute of Public Finance ( email )

79-6 Garak-Dong, Songpa-Ku
United States

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