## Growth Gains from Trade and Education

_IMF Working Papers, March 1, 1999_

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## Bibliographic details
- Authors: Yong-jin Kim, Se-Jik Kim
- Published: March 1, 1999
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451844023.001

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### Model and mechanism
- Presents a multisector growth model where education enhances general human capital.
- General human capital is essential for increasing or maintaining the mobility of workers across industries.
- Education combined with international trade raises workers’ ability to adapt and move to industries with the greatest productivity in each period.

### Key findings and scenarios
- Education and trade can affect long-run growth positively by increasing worker adaptability and mobility.
- Depending on the initial ratio of general-to-specific human capital stock, multiple equilibrium growth paths can exist, including a poverty trap.
- If the ratio of general-to-specific human capital stock is not substantially low, trade liberalization can allow an economy in a poverty trap to transform into one with continuous education and higher output growth.

### Policy implications and recommendations
- Foster general education to enhance workforce mobility across sectors.
- Pursue trade liberalization as a complement to education policies, particularly where general human capital is sufficient to enable sectoral mobility.
- Monitor the ratio of general-to-specific human capital stock as a key indicator of whether trade liberalization will yield sustained growth or leave an economy in a poverty trap.

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## Content in this bundle

- **Growth Gains from Trade and  Education -WP/99/23**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/growth-gains-from-trade-and-education-2894_