Munich Personal RePEc Archive

Human capital investment and growth: A dynamic education model

Ben Mimoun, Mohamed and Raies, Asma (2008): Human capital investment and growth: A dynamic education model. Published in: Journal of Business Affairs , Vol. Volume, No. Issue 1 (2008): pp. 1-22.

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Abstract

The paper aims to explicitly determine the distribution of human capital across hierarchic educational stages along the transition process, and to analyse the determinants of its evolution. We apply optimal control principles in a model of endogenous growth with two successive stages of education. We show that with initial relative scarcity of advanced human capital, the duration of studies at the advanced level should increase until reaching its equilibrium level. We also find that, by raising the duration of studies at the advanced schooling level, improvements in the quality of education at this level also enhances the economy’s growth rate, both in the transition and in the long-run.

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