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To better understand the long-term consequences and the possible channels (mainly, technological progress and human capital accumulation) through which a declining population may eventually sustain long-run economic growth and innovation in advanced economies, we build an endogenous, non-scale growth model with horizontal R&D activity and human capital investment. Population growth and per capita human capital accumulation are linked to each other by means of what in the paper is identified as the 'multiplicative effect' of population. As long as the strength of this effect exceeds a given positive threshold, population growth and per-capita income growth can be negatively correlated. This means that a negative rate of population growth can sustain a positive economic growth rate in the long run. • Human capital investment is embedded into an R&D-based endogenous growth model. • The law of motion of per-capita human capital includes a class-size effect. • Economic growth is simultaneously sustained by R&D– and human capital–investments. • Conditions are found for negative population growth to yield positive macro effects. • We challenge the idea that a declining population is always bad for long-run growth. [ABSTRACT FROM AUTHOR]

This study identifies cross-country and intertemporal differences in the effects of trade exposure on per capita national income. We develop a small open economy endogenous growth model with high- and low-technology sectors and endogenous human capital accumulation. We then test the predictions of our model on a sample of 70 countries over the period 1980–2017. Our main assertion is that gains from trade are not only disproportionate across countries but also contrasting over time, depending on the technology intensity of exports. Countries with lower initial experience in the production of technology-intensive goods and services tend to specialize in sectors with lower demand for better-educated and high-skilled workforce, which lowers the return to and individual incentives for education. Consequently, trade-induced specialization patterns, due to their implications about technological progress, appear to be an important factor causing cross-national divergence in welfare. Our theoretical model implies that, in an unskilled labor-abundant country, higher exposure to international trade can decrease the long-run growth rate, even though it increases short-run per capita income. In a skilled-labor abundant country, both short-run and long-run effects are positive. Our empirical findings, which identify short-run and long-run effects separately, strongly support these predictions. [ABSTRACT FROM AUTHOR]

There is a difference between the ways investment in general and advanced education affects human capital accumulation. Based on the endogenous economic growth model, this study considered the impact of hierarchical education investment on human capital accumulation and economic growth. Using Provincial Panel Data, the empirical analysis found that only investment in general education had a significant effect on economic output per capita, while the effect of investment in advanced education was insignificant. Increasing investment in general education could promote technological progress. However, increasing investment in advanced education does not, which means that the human capital accumulated as a result of advanced education does not have the expected benefit. Furthermore, the expansion of enrolment in colleges and universities promoted the effect of advanced education on economic output and technological progress. [ABSTRACT FROM AUTHOR]

The current nexus between education and economic growth leads us to propose a hybrid and integrated theoretical model. The variables chosen for this research were human capital and labour, and their impact on unemployment and economic growth was considered. In the validation of the theoretical model, different equations were contemplated, and the ARDL co-integration technique for its estimation was chosen. This study emphasizes the importance of technological progress, physical capital and human capital; the latter is measured by educational training and its interactive effect on employment and unemployment in explaining the behaviour of economic growth in the US from 1981 to 2019. The results show different statistical significance in the short and long term. These results corroborate the premise that there are partial adjustments in the short term, particularly after an economic crisis. In the long term, economic growth is affected by the positive or negative magnitudes of the product elasticity for each of the drivers considered. In terms of policy implications, a combination of structural and demand-driven policies must be implemented to reduce unemployment, in particular, to halt protracted economic recessions. • ARDL confirms long-run relationship is observed for all six equations. • In the short term, the increase in secondary education and unemployment reduces GDP. • In the short term, the increase in tertiary education and unemployment reduces GDP. • In the short term, any imbalance in GDP converges in the long term. • In the long run, a rise in tertiary education and jobless have a tiny impact on GDP. [ABSTRACT FROM AUTHOR]