Korea, Korean economic structure, input-output tables, economy
The purpose of this paper is to study the effect of economic policy such as subsidy or tax reduction by the government on education and research activities. The data to be utilized are the input-output tables reported by the Bank of Korea for 1980 and 1990. Using an input-output table, we found a growing effect of education cost reduction on economic development. Unlike the traditional analysis by Leontief, input substitution is possible in the model we have used in this paper. As a result, we could predict the economys response to cost variation. A surfeit of fervent passion on education among Koreans has been criticized as the source of a negative effect on the economy. However, the structural capability to accept these highly education human resources must have grown for the past ten years. From the evidence of this trend, we can deduce a positive effect of education and research on the economy in the future.