DOI: 10.5176/2010-4804_2.1.170
Authors: Tiraphap Fakthong
Abstract:
In this study, I examine the convergence in income inequality and economic growth under two governmental regimes on human capital, wherein the first one only has education subsidy and the second one has education subsidy and research and development (R&D) investment. From model simulation, adding R&D investment to education subsidy in a poor economy results in convergence in income and long-run economic growth compared with another scenario, in which only education subsidy is added. In contrast to the simulation results, household income distribution and other labor force statistics show that Thailand’s economic growth is not transformed to widespread benefits. Having an economy that depends on labor-based production, most of the laborers in the economy have low educational level, while highly-educated laborers are unemployed. This situation deters long-run competitiveness and economic productivity; thus, income inequality can irrefutably become more notable in the country in the next decade. The results of this study suggest that the Thai government should not make human capital investments solely through education policies, but create more compatible and significant changes at the technology level in the economy through concurrent R&D investments. Moreover, the concerns on the effects of policy on budget distribution require careful assessment
Keywords: Education, Growth, Inequality, Research and Development
Updating...