Human Capital and the Future of Transition Economies

Michael Spagat

No 01/3, Royal Holloway, University of London: Discussion Papers in Economics from Department of Economics, Royal Holloway University of London

Abstract: Transition economies have an initial condition of high human capital relative to GDP per capita. But they will not necessarily realize their latent high growth potential. In the model, at a good equilibrium a large number of children of well-educated parents take advantage of their family backgrounds and invest substantially in their own human capital. At a bad equilibrium, past educational achievements are wasted as children fail to build upon their parents' achievements. I argue that this sort of multiple equilibria provides a basis for distinguishing development economics from transition economics.

Keywords: Transition; Development; Human Capital; Education; Growth; Multiple Equilibria (search for similar items in EconPapers)
JEL-codes: D1 I2 J24 O1 O15 P2 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2001-12, Revised 2001-12
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Related works:
Journal Article: Human capital and the future of transition economies (2006)
Working Paper: Human Capital and the Future of Transition Economies (2002)
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