Tree Essays on Human Capital in Korean Growth Path

Abstract

Human capital and technological progress are crucial factors in the Unified Growth Theory, which gives the most relevant answer to the crucial question of why some countries are rich, while others are poor. Although researchers have made various approaches, both historical and theoretical, toward this important question, there has been no general answer that is applicable to all of human history. Unified Growth Theory, however, covers the span of human civilization, from the Malthusian agricultural economy to the modern industrial economy, in a single dynamic system that covers the factors that other studies have focused on. In the Unified Growth Theory, human capital is a key factor in understanding the transition toward modern industrialized economy. This thesis aims to explain Korean economic development/growth path by examining the human capital and the conditions that promoted human capital accumulation in the framework of the Unified Growth Theory. Before its independence in 1945, Korea was a typical agricultural society. In the agricultural society, because economic conflicts could erupt between the established landed elite and the emerging capitalist at the dawn of industrialization, the existence of a stronger landed elite often became an impediment toward industrialization. Inequality in landownership, therefore, can become an obstacle to human capital accumulation, the factor that can catalyze earlier industrialization. Chapter 3 will introduce a model that shows this pre-industrial political/economic conflict, reflecting the results of empirical analysis. The transition from agricultural to a modern growth economy was significantly influenced by a change in the allocation of resources, a result of the decisions of households to place priority on the quality, rather than the quantity, of their children. This change in the allocation of resources triggered a demographic transition, eventually allowing the society to escape the trapped Malthusian economy. Chapter 4, then, will present the theory of demographic transition, based on empirical analysis of Korean data from 1970 to 2010. After achieving the modern industrialized economy, a gap of income and wealth among individual diverse via human capital channel. Chapter 5 will introduce the expanded Galor-Zeira model, presenting empirical results covering the data from 1998 to 2008.