The purposes of this paper are to formulate an economic-demographic growth model for Korea and to analyse the policy impacts on population change and economic development. It is hoped that the result of this study would contribute to formulating a more efficient economic-demographic policy.
An economic-demographic growth model for Korea is formulated on the basis of the Suits-Mason model and other relevant models. The equations which explain the level of economic variables in the model are estimated by econometric methods using time-series data. Using the model, a basic prospect is derived as the reference of the comparison. For policy analysis four variables are selected as policy variables. They are total fertility rate (TFR), marginal gross capital formation rate (MGCFR), high school education rate of the working age population (RHE), and emigration rate (EMR). Different scenarios are assigned to each of these variables, and the future levels of economic and demographic variables under these scenarios are derived using simulation method. And economic gains from each policy are calculated as a measure to compare policies.
The major findings from this study are as follows. Different policies show different patterns of growth. The target fertility policy is efficient in reducing the population growth rate and in increasing the GNP growth rate. The investment policy and education policy contribute to rapid economic growth by increasing both capital stock and human capital. The emigration policy has a direct effect on the size of population, but has only minute effect on economic growth. If we use the policy mix of the fertility policy and the investment policy, the economic gain will be greater than the mere sum of the economic gains from each policy. That means we can attain synergy effect by mixing policies.
Based on these findings, we can conclude that a proper mix of various policies is both necessary and preferable to attain balanced economic growth and synergy effect.
