CAN EDUCATION BE GOOD FOR BOTH GROWTH AND THE ENVIRONMENT?

Abstract

We develop an overlapping-generations model of growth and the environment in relation to public policy on education. Beyond the traditional mechanisms through which knowledge, growth, and the environment interplay, we stress the role played by education in environmental awareness. Assuming first that environmental awareness is constant, we show the existence of a balanced-growth path (BGP) along which environmental quality increases continually. Then, if education enhances environmental awareness, the equilibrium properties are modified: the economy can reach a steady state or converge to an asymptotic BGP. Therefore, education does not necessarily promote sustained and sustainable growth.