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Strain-compensated InGaN-AlGaN quantum wells (QW) are investigated as improved active regions for lasers and light emitting diodes. The strain-compensated QW structure consists of thin tensile-strained AlGaN barriers surrounding the InGaN QW. The band structure was calculated by using a self-consistent 6-band kmiddotp formalism, taking into account valence band mixing, strain effect, spontaneous and piezoelectric polarizations, as well as the carrier screening effect. The spontaneous emission and gain properties were analyzed for strain-compensated InGaN-AlGaN QW structures with indium contents of 28%, 22%, and 15% for lasers (light-emitting diodes) emitting at 480 (500), 440 (450), and 405 nm (415 nm) spectral regimes, respectively. The spontaneous emission spectra show significant improvement of the radiative emission for strain-compensated QW for all three structures compared to the corresponding conventional InGaN QW, which indicates the enhanced radiative efficiency for light emitting diodes. Our studies show the improvement of the optical gain and reduction of the threshold current density from the use of strain-compensated InGaN-AlGaN QW as active regions for diode lasers.