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

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. JEL Classification H52 · O15 · R23 B Changkeun Lee

Regional preferences for the living environment and mobility of researchers and general workers: the case of Korea

“…Their roles in national development will undoubtedly become greater in the advent of the Fourth Industrial Revolution since it is mainly based on knowledge-based industries and researchers are key players in these industries. In this regard, regional development thus depends upon a capability to retain the high-skilled workers in their regions (Lim et al 2015).…”

Human Capital as a Key Factor of Economic Growth in Crisis

“…The issues related to study of the notion and sense of human capital and its role in development of entrepreneurial structures are viewed in the works by (Goedhuys and Sleuwaegen, 2016), (Meier et al, 2016), (Benzoni and Chyruk, 2015), (Lim et al, 2015), (Chechina, 2015), etc.…”

Mobility of Workers and Population between Old and New Capital Cities Using the Interregional Economic Model

“…House members produce K + 1 times labor input in each house. The total population in each region is shown as in Equation (1). The size of the total population is fixed.…”

“…Economic concentration in Seoul, the capital city of Korea, has had a negative impact on urban sustainable growth, interregional balanced development, the housing market, and environmental pollution [1]. To tackle this issue with policy tools, the Korean government decided to relocate 36 government ministries and agencies from Seoul to Sejong city (approximately 160 km south of Seoul, the capital city of Korea), the new administrative capital, in 2007, with the Presidential Office, the National Assembly, and all the foreign embassies remaining in Seoul.…”