The Effect of Education Policy on Trade and Growth

Gieyoung Lim
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Gieyoung Lim: Hankuk University of Foreign Studies

Korean Economic Review, 2000, vol. 16, 59-78

Abstract: We analyze the effects of education policy in a model of overlapping generations with endogenous human capital formation and endogenous growth through learning by doing.. First, we show how an economy's stock of human capital and growth rate are affected by active government intervention in education under autarky. It is demonstrated that active government support of education is desirable in terms of economic growth. Second, we investigate how the trade pattern is influenced by education policy in an open economy. It is argued that, after a comparison of the positive and negative effects of educational studies, the alternation of factor composition through the government subsidies could enhance economic growth by increasing the production and export of human capital intensive goods.

Keywords: education policy; human capital; trade; growth (search for similar items in EconPapers)
JEL-codes: F1 H2 H3 (search for similar items in EconPapers)
Date: 2000
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