We address the effects of population aging on economic growth, taking account of itsgrowth-delaying effects, through the reduction of capital accumulation and labor force, andthe R&D investment reduction due to its lowered return resulting from reduced market size,as well as its growth-promoting effects, through the increase in educational investment dueto decrease in the number of child per parent. The policy simulations with a generalequilibrium model and its calibration, reflecting the Korean economy, show that: (1) thepopulation aging delays technological progress as well as quantitative economic growth; (2)the government subsidies to R&D and educational investment can partly compensate for theloss in economic growth due to the population aging, but they cannot deal with the problemfundamentally; and (3) the optimal subsidy rates to R&D and education are quite high,ranging from 50 to 70% to R&D and from 70 to 80% to education.