IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v54y2016icp126-138.html
   My bibliography  Save this article

Impact of educational investments on economic losses from population ageing using an interregional CGE-population model

Author

Listed:
  • Kim, Euijune
  • Hewings, Geoffrey J.D.
  • Lee, Changkeun

Abstract

This paper uses an interregional CGE-Population model of Korea to estimate the regional effects of population ageing on the economic losses from 2015 to 2060. The model accounts for the economic behavior of producers and consumers on the real side economies of two regions: the Seoul Metropolitan Area and the rest of Korea. Population demographics are disaggregated into eight age cohorts, and each age group has different parameters and values for labor productivity and participation rates in the labor market on the supply side and saving rates and consumption behaviors on the demand side. The ageing trend could cause a reduction in the GDP by 0.92% on average, but the damage could be compensated for through an additional increase in educational investments in the 20–29 age cohort by 4% for at least 10 consecutive years. However, the investment policy has a negative impact on the regional income distribution due to different elasticity values of education by age cohort with respect to human capital productivity.

Suggested Citation

  • Kim, Euijune & Hewings, Geoffrey J.D. & Lee, Changkeun, 2016. "Impact of educational investments on economic losses from population ageing using an interregional CGE-population model," Economic Modelling, Elsevier, vol. 54(C), pages 126-138.
    • Handle: RePEc:eee:ecmode:v:54:y:2016:i:c:p:126-138
    DOI: 10.1016/j.econmod.2015.12.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999315004113
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2015.12.015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dalton, Michael & O'Neill, Brian & Prskawetz, Alexia & Jiang, Leiwen & Pitkin, John, 2008. "Population aging and future carbon emissions in the United States," Energy Economics, Elsevier, vol. 30(2), pages 642-675, March.
    2. Geoffrey Hewings & Seryoung Park, 2007. "Aging and the Regional Economy: Simulation Results from the Chicago CGE Model," EcoMod2007 23900037, EcoMod.
    3. Sébastien Mary & Euan Phimister & Deborah Roberts & Fabien Santini, 2013. "Testing the sensitivity of CGE results: A Monte Carlo Filtering approach to an application to rural development policies in Aberdeenshire," JRC Research Reports JRC85290, Joint Research Centre.
    4. Fougère, Maxime & Harvey, Simon & Mercenier, Jean & Mérette, Marcel, 2009. "Population ageing, time allocation and human capital: A general equilibrium analysis for Canada," Economic Modelling, Elsevier, vol. 26(1), pages 30-39, January.
    5. Alexander Ludwig & Thomas Schelkle & Edgar Vogel, 2012. "Demographic Change, Human Capital and Welfare," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(1), pages 94-107, January.
    6. De Maio, Lorenzo & Stewart, Frances & van der Hoeven, Rolph, 1999. "Computable General Equilibrium Models, Adjustment and the Poor in Africa," World Development, Elsevier, vol. 27(3), pages 453-470, March.
    7. Uwe Blien & Gunther Maier (ed.), 2008. "The Economics of Regional Clusters," Books, Edward Elgar Publishing, number 12881.
    8. Robinson, Sherman, 1989. "Multisectoral models," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 2, chapter 18, pages 885-947, Elsevier.
    9. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    10. Dekle, Robert, 2000. "Demographic Destiny, Per-Capita Consumption, and the Japanese Saving-Investment Balance," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 16(2), pages 46-60, Summer.
    11. Young Jun Chun, 2006. "Population Aging, Fiscal Policies, and National Saving: Predictions for Korean Economy," NBER Working Papers 12265, National Bureau of Economic Research, Inc.
    12. Alexander Ludwig & Thomas Schelkle & Edgar Vogel, 2012. "Demographic Change, Human Capital and Welfare," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(1), pages 94-107, January.
    13. Stephan Brunow & Georg Hirte, 2009. "The age pattern of human capital and regional productivity: A spatial econometric study on german regions," Papers in Regional Science, Wiley Blackwell, vol. 88(4), pages 799-823, November.
    14. Tae-jeong Kim & Geoffrey Hewings, 2013. "Endogenous Growth in an Aging Economy: Evidence and Policy Measures," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 705-730, June.
    15. David E. Bloom & David Canning & Gunther Fink, 2009. "The Graying of Global Population and Its Macroeconomic Consequences," PGDA Working Papers 4709, Program on the Global Demography of Aging.
    16. Babiker, Mustafa & Gurgel, Angelo & Paltsev, Sergey & Reilly, John, 2009. "Forward-looking versus recursive-dynamic modeling in climate policy analysis: A comparison," Economic Modelling, Elsevier, vol. 26(6), pages 1341-1354, November.
    17. Lisenkova, Katerina & Mérette, Marcel & Wright, Robert, 2013. "Population ageing and the labour market: Modelling size and age-specific effects," Economic Modelling, Elsevier, vol. 35(C), pages 981-989.
    18. Fougere, Maxime & Mercenier, Jean & Merette, Marcel, 2007. "A sectoral and occupational analysis of population ageing in Canada using a dynamic CGE overlapping generations model," Economic Modelling, Elsevier, vol. 24(4), pages 690-711, July.
    19. Börsch-Supan, Axel, 2004. "GLOBAL AGING - Issues, Answers, More Questions," Sonderforschungsbereich 504 Publications 07-28, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    20. Antoine Belgodere & Charles Vellutini, 2011. "Identifying key elasticities in a CGE model: a Monte Carlo approach," Applied Economics Letters, Taylor & Francis Journals, vol. 18(17), pages 1619-1622.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. József Popp & Judit Oláh & Anna Kiss & Zoltán Lakner, 2019. "Food Security Perspectives in Sub-Saharan Africa," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 21(51), pages 361-361.
    2. Li, Wei & Lu, Can & Ding, Yi & Zhang, Yan-Wu, 2017. "The impacts of policy mix for resolving overcapacity in heavy chemical industry and operating national carbon emission trading market in China," Applied Energy, Elsevier, vol. 204(C), pages 509-524.
    3. Martin Stepanek, 2022. "Sectoral Impacts of International Labour Migration and Population Ageing in the Czech Republic," Computational Economics, Springer;Society for Computational Economics, vol. 60(2), pages 375-400, August.
    4. repec:aud:audfin:v:21:y:2019:i:51:p:361 is not listed on IDEAS
    5. Euijune Kim & Seung‐Woon Moon & Yoojin Yi, 2021. "Analyzing spillover effects of development of Asian highway on regional growth of Northeast Asian countries," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1243-1266, August.
    6. Jiang, Min & Kim, Euijune, 2024. "Measuring the impacts of the two-child policy on industrial structure and economic growth in china using a CGE model," Journal of Asian Economics, Elsevier, vol. 92(C).
    7. Euijune Kim & Seung-Woon Moon & Shigemi Kagawa, 2019. "Spatial economic linkages of economic growth and air pollution: developing an air pollution-multinational CGE model of China, Japan, and Korea," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(2), pages 255-268, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Garau, Giorgio & Lecca, Patrizio & Mandras, Giovanni, 2013. "The impact of population ageing on energy use: Evidence from Italy," Economic Modelling, Elsevier, vol. 35(C), pages 970-980.
    2. Woodland, A., 2016. "Taxation, Pensions, and Demographic Change," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 713-780, Elsevier.
    3. Tim Buyse & Freddy Heylen & Renaat Van de Kerckhove, 2013. "Pension reform, employment by age, and long-run growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 769-809, April.
    4. Heylen Freddy & Van de Kerckhove Renaat, 2013. "Employment by age, education, and economic growth: effects of fiscal policy composition in general equilibrium," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 49-103, October.
    5. Elke Loichinger & Yen-hsin Alice Cheng, 2018. "Feminising the workforce in ageing East Asia? The potential of skilled female labour in four advanced economies," Journal of Population Research, Springer, vol. 35(2), pages 187-215, June.
    6. Yen-hsin Alice Cheng & Elke Loichinger, 2017. "The Future Labor Force of an Aging Taiwan: The Importance of Education and Female Labor Supply," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 36(3), pages 441-466, June.
    7. N Renuga Nagarajan & Mineko Wada & Mei Lan Fang & Andrew Sixsmith, 2019. "Defining organizational contributions to sustaining an ageing workforce: a bibliometric review," European Journal of Ageing, Springer, vol. 16(3), pages 337-361, September.
    8. Taoyuan Wei & Qin Zhu & Solveig Glomsrød, 2017. "A General Equilibrium View of Population Ageing Impact on Energy Use via Labor Supply," Sustainability, MDPI, vol. 9(9), pages 1-12, August.
    9. Sabadini Carvalho, Terciane & Santiago, Flaviane & Perobelli, Fernando, 2018. "Demographic Changes and its Impacts on Consumption and Greenhouse Gas Emissions in Brazil: a computable general equilibrium model approach," Conference papers 332970, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Willem DEVRIENDT & Freddy HEYLEN, 2020. "Macroeconomic and Distributional Effects of Demographic Change in an Open Economy - The Case of Belgium," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 86(1), pages 87-124, March.
    11. Elke Loichinger, 2015. "Labor force projections up to 2053 for 26 EU countries, by age, sex, and highest level of educational attainment," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 32(15), pages 443-486.
    12. Kolasa, Aleksandra & Rubaszek, Michał, 2016. "The effect of ageing on the European economies in a life-cycle model," Economic Modelling, Elsevier, vol. 52(PA), pages 50-57.
    13. Freddy Heylen & Renaat Van de Kerckhove, 2014. "Heterogeneous ability and the effects of fiscal policy on employment, income and welfare in general equilibrium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 14/898, Ghent University, Faculty of Economics and Business Administration.
    14. Groneck, Max & Ludwig, Alexander & Zimper, Alexander, 2016. "A life-cycle model with ambiguous survival beliefs," Journal of Economic Theory, Elsevier, vol. 162(C), pages 137-180.
    15. Lewis, Jeffrey D. & Robinson, Sherman & Wang, Zhi, 1995. "Beyond the Uruguay Round: The implications of an Asian free trade area," China Economic Review, Elsevier, vol. 6(1), pages 35-90.
    16. T. Buyse & F. Heylen & R. Van De Kerckhove, 2011. "Pension reform, employment by age, and long-run growth in OECD countries," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/719, Ghent University, Faculty of Economics and Business Administration.
    17. Adams, Philip D. & Dixon, Peter B., 1997. "Generating detailed commodity forecasts from a computable general equilibrium model," International Journal of Forecasting, Elsevier, vol. 13(2), pages 223-236, June.
    18. Sang-Hyop Lee & Jungsuk Kim & Donghyun Park, 2017. "Demographic Change and Fiscal Sustainability in Asia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(1), pages 287-322, October.
    19. Nishiyama, Shinichi, 2015. "Fiscal policy effects in a heterogeneous-agent OLG economy with an aging population," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 114-132.
    20. Vogel, Edgar & Ludwig, Alexander & Börsch-Supan, Axel, 2017. "Aging and pension reform: extending the retirement age and human capital formation," Journal of Pension Economics and Finance, Cambridge University Press, vol. 16(1), pages 81-107, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:54:y:2016:i:c:p:126-138. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.