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Contributions of human capital investment policy to regional economic growth: an interregional CGE model approach

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  • Jaewon Lim
  • Changkeun Lee
  • Euijune Kim

Abstract

The purpose of this paper is to examine the regional impact of educational investment policies on migration and economic growth utilizing an interregional computable general equilibrium (ICGE) model with a human capital module. The CGE model is developed for three industrial sectors of two regions in South Korea, specifying the behaviors of the following economic agents: six producers, two regional households, two regional governments, a national (central) government, and the rest of the world. The model primarily focuses on structural linkages among migration, university education, labor productivity, and human capital formation in the short run and long run. Our paper demonstrates that the impact of the human capital investment on GRP growth was higher for the 30s age cohort than for any other age cohort, and this holds for both the Seoul Metropolitan Area (SMA) and the rest of Korea (ROK). With the aim of reducing regional disparity and of redistributing concentrated populations, the national government’s human capital investment policy should focus on local job training programs with the target population of the 30s age cohort in the ROK. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Jaewon Lim & Changkeun Lee & Euijune Kim, 2015. "Contributions of human capital investment policy to regional economic growth: an interregional CGE model approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 269-287, December.
    • Handle: RePEc:spr:anresc:v:55:y:2015:i:2:p:269-287
    DOI: 10.1007/s00168-015-0690-0
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    2. Hyun-kyung Lee & Hong-bae Kim, 2019. "Regional preferences for the living environment and mobility of researchers and general workers: the case of Korea," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(1), pages 169-186, February.
    3. A.V. Sultanova & O.S. Chechina, 2016. "Human Capital as a Key Factor of Economic Growth in Crisis," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 71-78.
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    6. Nwaogwugwu, Chii & Evans, Olaniyi, 2019. "What are the Short-run and Long-run Drivers of Human Capital Development in Nigeria?," MPRA Paper 97130, University Library of Munich, Germany.
    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.

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    More about this item

    Keywords

    H52; O15; R23;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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