Higher Education Subsidy Policy and R&D-based Growth

Takaaki Morimoto and Ken Tabata
Additional contact information
Takaaki Morimoto: Graduate School of Economics, Osaka University

No 178, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: Employing a two-period overlapping generations model of R&D-based growth with both product development and process innovation, this paper examines how a subsidy policy for encouraging more individuals to receive higher education affects the per capita GDP growth rate of the economy. We show that when the market structure adjusts partially in the short run, the effect of an education subsidy on economic growth is ambiguous and depends on the values of the parameters. However, when the market structure adjusts fully in the long run, the education subsidy expands the number of firms but reduces economic growth. These unfavorable predictions for the education subsidy on economic growth are partly consistent with empirical findings that mass higher education does not necessarily lead to higher economic growth. A higher education subsidy policy is perhaps inappropriate for the purpose of stimulating long-run economic growth.

Keywords: Higher Education; Occupational Choice; R&D; Product Development; Process Innovation (search for similar items in EconPapers)
Pages: 42 pages
Date: 2018-02, Revised 2018-02
New Economics Papers: this item is included in nep-cse, nep-dge, nep-edu, nep-gro and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://192.218.163.163/RePEc/pdf/kgdp178.pdf First version, 2018 (application/pdf)

Related works:
Journal Article: HIGHER EDUCATION SUBSIDY POLICY AND R&D-BASED GROWTH (2020)
Working Paper: Higher Education Subsidy Policy and R&D-based Growth (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:178

Access Statistics for this paper

More papers in Discussion Paper Series from School of Economics, Kwansei Gakuin University Contact information at EDIRC.
Bibliographic data for series maintained by Toshihiro Okada ().