Does the Diversity of Human Capital Increase GDP? A Comparison of Education Systems

Katsuya Takii and Ryuichi Tanaka

No 06-19, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper examines how different education systems affect GDP by influencing the diversity of human capital. We construct an overlapping generation model in which agents are heterogeneous in income and innate ability, and the final goods are produced with differentiated intermediate goods. We analyze an economy in which an income distribution converges to a stationary distribution. It is shown that the diversity of human capital induced by income inequality always lowers the GDP of the next period, while the diversity of human capital induced by heterogeneous ability can increase GDP, if the produced intermediate goods are sufficiently substitutable and firms have a large span of control. Hence, as public education equalizes education resources across households, it mitigates the negative effect of income inequality on GDP, while the effects of ability tracking crucially depend on the production structure of the economy.

Keywords: Span of control; Complementarities; Human capital; Ability tracking (search for similar items in EconPapers)
JEL-codes: D31 D72 H42 I22 O11 O15 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2006-07
New Economics Papers: this item is included in nep-dev, nep-edu, nep-hrm and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www2.econ.osaka-u.ac.jp/library/global/dp/0619.pdf (application/pdf)

Related works:
Journal Article: Does the diversity of human capital increase GDP? A comparison of education systems (2009)
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:osk:wpaper:0619

Access Statistics for this paper

More papers in Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by The Economic Society of Osaka University ().