procedure is used to estimate the parameters of the productivity equations instead of the ordinary least squares method. The successive regression runs show that the predicted wages of male workers increase smoothly up to age 50, and decline thereafter, whereas the predicted wages of female workers increase up to 25, but during the prime childbearing period of women(25~35) wages decline slightly. The predicted wages of female workers increase again between the ages 35 and 50, reach a peak at age 50, and decline thereafter.
Effective labor input, or labor input in quality units, it defined as the sum of the labor force weighted by the productivity index which is approximated by the wage level of workers according to their level of educational attainment and age group. Labor input in quality units increased by 4.7 percent annually during the period 1955~1979.
The quality index, or effective labor input divided by the total number in the labor force, increased by approximately 0.9 percent annually during the same period.
In order to determine the effect of the changing characteristics of the labor force on the over-all economic growth during the period 1980~2025, a specific form of the Cobb-Douglas type of production function is used. The estimation results show that the residual, or technical change as it is often designated to be 0.31, whereas the capital share is estimated to be 0.69. GNP grew by an annual rate of 7.6 percent during the period 1955~1979, and 0.27 percentage points, or 3.5 percent of the GNP growth rate was explained by the quality improvement of labor.
In order to show the effect of changing characteristics of the labor force on the future economic growth of Korea, the econometric model of Korea developed by Mason, Suits, et all, is used. The following is a summary of the projection results of the model: (1) as we gradually increase the rates of graduation and continuation from a low to a high level, more and more people will be enrolled, and as a result, relatively fewer people will be taking part in the labor market to produce a larger amount of output; (2) due to significant declines in fertility and mortality rates, the population aging phenomena will start to become noticeable, and more and more order people will be employed in the labor market. Thus, the average age of the workers will increase from 37.6 years in 1979 to 40.9 years in 2025 if we adopt the low target level of graduation and continuation rates; (3) in the year 2025 approximately 90 percent of the labor force will have at least secondary education if we adopt the high target level; (4) per capita GNP in the year 2000 will be 4,484 dollars if we adopt the high target level.
The reason we cannot observe significant differences in the growth rates of GNP and per capita GNP according to the various target levels of graduation and continuation rates is that the momentum for steady growth was already built into the trend even when we choose the low target level.