human capital: cause and effect of the economic growth. an empirical analysis

Abstract

From the birth of the human capital theory, economists were interested to find evidences showing the impact of the human capital on the economic output, discussing and debating more or less the effect of economic growth on the accumulation of human capital in the economy and the association between education and health. The paper aims to test several econometric models to explain the relationship between human capital and economic output. Using World Bank data, 17 countries with the fastest economic growth rate during 1960-2010 were selected. Four econometric models are tested to explain the accumulation of human capital as input and as effect of economic output. Correlation coefficients were calculated to highlight the association between education and life expectancy. The paper demonstrates that human capital, in his two components (education and health), in countries with a fast growth rate, are positively and strongly related to the economic output, in both senses, human capital being input and output of the economic growth. On the one hand, the economic growth adds to the resources available in the economy for improvements in health and education and, on the other hand, human capital is influencing significantly the economic output. Education and health are interrelated, being positively and strongly associated.