Regionally unequal accumulation of human capital and educational policy

Research Project

Project/Area Number	09430018
Research Category	Grant-in-Aid for Scientific Research (B)
Allocation Type	Single-year Grants
Section	一般
Research Field	Public finance/Monetary economics
Research Institution	Nagoya University
Principal Investigator	OKUNO Nobuhiro Nagoya University, School of Economics, Professor, 経済学部, 教授 (70022465)
Co-Investigator(Kenkyū-buntansha)	KURODA Tatsuaki Nagoya University, School of Informatics and Sciences, Professor, 情報文化学部, 教授 (00183319) MIZUTA Kenichi Hiroshima University, School of Education, Associate Professor, 教育学部, 助教授 (00157497) YAKITA Akira Chukyo University, School of Economics, Professor, 経済学部, 教授 (50135290) OGAWA Hikaru Nagoya University, School of Economics, Lecturer, 経済学部, 講師 (10313967) YAGI Tadashi Doshisya University, School of Economics, Associate Professor, 経済学部, 助教授 (60200474) 小林弥生愛知大学, 経済学部, 助教授 (50278222)
Project Period (FY)	1997 – 1999
Project Status	Completed (Fiscal Year 1999)
Budget Amount *help	¥4,700,000 (Direct Cost: ¥4,700,000) Fiscal Year 1999: ¥1,000,000 (Direct Cost: ¥1,000,000) Fiscal Year 1998: ¥1,500,000 (Direct Cost: ¥1,500,000) Fiscal Year 1997: ¥2,200,000 (Direct Cost: ¥2,200,000)
Keywords	human capital / public education / regional economy / educational grant / social capital / 教育 / 地方財政
Research Abstract	The efficiency in accumulating human capital in a region is affected by the limited regional environment. For example, a research activity is stimulated in high quality laboratories with excellent researchers. Through the research activity in the region, the researcher embodies his research ability. This kind of positive externality is also a driving force which stimulates workers movement among regions. When we consider the externalities in human capital accumulation, the market mechanism does not necessarily achieve an optimal allocation of human capital among regions. This report studies the data of regionally unequal accumulation of human capital and examines the optimal allocation of educational public investment among regions, which achieves the largest national economic growth in a economy. Our analysis shows that the threshold externality in human capital accumulation affects an optimal allocation policy through two changes. One is through the changes in marginal value of educational public capital, and the other is through the changes in decreasing speed of shadow prices of educational public capital. With the effects of threshold externalities and labor movements among regions, we show that the optimal pattern of regionally allocating educational public investment includes the switch of allocation from the region with large human capital to the region with small human capital. It is noteworthy that the switch of allocation may occur from the efficiency objective.