Availability of Higher Education and Long-Term Economic Growth

Authors :: Horii, Ryo
Kitagawa, Akiomi
Futagami, Koichi
Source :: Discussion Papers In Economics And Business.
Publication Year :: 2005
Publisher :: Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University, 2005.
Abstract: * Revised: [03-14, 2003]<br />This paper examines the economic growth effects of limited availability ofhigher education in a simple endogenous growth model with overlapping generations.With limited availability, the scarcity of human capital keeps its price highand distributes a larger share of the aggregate output to young households. Undercertain conditions, it leads to greater aggregate savings in each period, thereby enablingthe economy to grow faster than without any limitation. In such cases, anexcessive expansion in the availability causes a temporary boom followed by a seriousdeficiency in investible funds, resulting in a substantial slowdown in economicgrowth.