Education and Economic Growth in Slovenia: A Dynamic General Equilibrium Approach with Endogenous Growth

Miroslav Verbič, Boris Majcen and Mitja Cok

MPRA Paper from University Library of Munich, Germany

Abstract: In the article we model education and human capital as major endogenous growth elements in a small open economy general equilibrium framework and consider several policy scenarios for Slovenia. Decrease of the PIT rate and increase of government spending on education turned out to be the most effective policy measures. It is important, though, to understand its transitory dynamic. Namely, as education expenditure is increased, certain amount of labour is temporarily withdrawn from its productive use and put into the educational system. Higher skill upgrade of labour requires longer and higher short-term labour force decrease, but also provides us with higher long-term growth. The households that would gain more utility from such policy scenarios are those with more skilled labour and thus higher income level.

Keywords: education; endogenous growth; general equilibrium modelling; Slovenia (search for similar items in EconPapers)
JEL-codes: C68 D58 E24 H52 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-dge, nep-edu, nep-fdg, nep-hrm, nep-lab and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17817

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