The purpose of this paper is to examine the impact of education and R&D investment on regional economic growth in South Korea. We develop a simultaneous model of production, human capital accumulation, migration, population and physical capital investment of two regions: the Seoul Metropolitan Area and the rest of Korea. We decompose the regional growth path into a quality path and a quantity path to identify how regional economies grow and run simulations to evaluate alternative policies in terms of effectiveness and adaptability. The impact of education and R&D investment on regional growth in the rest of Korea is only 22.3% of that in the Seoul Metropolitan Area due to lower elasticity values of young in-migrants with respect to the investment in the rest of Korea. An enhanced efficiency of regional human capital accumulation is effective and adaptable to alleviate regional economic disparity.
Public Affairs, Public Policy and Public Administration
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The Impact of Education and R&D Investment on Regional Economic Growth.