Availability of Higher Education and Long-Term Economic Growth

Osaka University Discussion Papers in Economics and Business Working Paper No. 03-14-Rev

37 Pages Posted: 3 Aug 2004

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: September 2005

Abstract

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.

Keywords: Endogenous Growth; Human Capital; Slowdown; Intergenerational Income Distribution

JEL Classification: O41

Suggested Citation

Horii, Ryo and Kitagawa, Akiomi and Futagami, Koichi, Availability of Higher Education and Long-Term Economic Growth (September 2005). Osaka University Discussion Papers in Economics and Business Working Paper No. 03-14-Rev. Available at SSRN: https://ssrn.com/abstract=572030 or http://dx.doi.org/10.2139/ssrn.572030

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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