Since the early 1960's, the economics of education has been one of the most rapidly growing branches of economics and there has been many researches that show the importance of education for economic growth.
This thesis is related to the following questions : Has an investment in education had an effect on the economic growth of Korea? If any, what is the magnitude of the impact? Through which channels has such impact exerted on the economic growth?
The first question is answered through the review of past researches in Korea. To solve other questions, econometric model based on Suits' model is tested with the time series data for 18 years from 1961 to 1978, and a simulation of this model is conducted.
The result shows that education is closely connected with labor productivity which is the major determinant of economic growth and that an additional investment in education has a higher yield than an additional investment in other real sectors of economy or family planning program.
In addition, it is shown that as the average level of education rises, total fertility rate decreases and, thus slowing down the rate of population growth.
Consequently, it can be said that an investment in education can be used as a tool for population control as well as for economic growth, and that an investment in education should be increased in order to sustain economic growth.
