A System Dynamic Model and Policy Analysis for National Education and Economy Development

Abstract

Most of the developing countries are faced the problem how to allocate limited resource to education to promote economy growth. In this paper, the System Dynamics methodology is employed to solve the problem. The interactions between education, economy and Science-Technology (S&T), and the inherent mechanism of education and economy are studied. Based on these studies, a system dynamics model for the national education and economy development is established. According to the actual socio-economic situation of China, several different resource allocation policies for education are tested on the model. Finally, some useful policy suggestions about resource allocation for education are given, such as the proper ratio of education expenditure to national income and the proper ratios of resources allocated to different levels of education.