ABSTRACT
This chapter assesses the possibility of modeling human capital investment by combining the economic framework provided by the E3ME-Asia macro-econometric model with recent advances in measuring the returns to education. The chapter considers the long-term effects of revenue recycling through education investment to boost human capital. Revenue recycling is used to reduce the economic short-term shocks from carbon or energy taxes. It also describes the private and public spending on education, and the returns of education in East Asian countries, with a focus on Japan and Korea. It further tries to account for the effect that investment in school education and post-school education, such as job training, has on productivity. The chapter then assesses the possibility of creating a triple dividend of better environmental outcomes, higher economic production, and a more educated workforce and assess whether education-led green growth is a sensible strategy in Japan and Korea.
