The impact of human capital development on the economic and social development of a country: empirical study

Authors

DOI:

https://doi.org/10.17770/etr2015vol2.268

Keywords:

economic growth, global competitiveness index, human capital, human capital index, human development index

Abstract

Methodologically this research is based on the approach of many social scientists who argue that there is a bidirectional link: one runs from human capital development to economic growth and overall human development, when human capital helps increase national income and society development; the other runs from economic growth to human capital development, as the resources from national income are allocated to activities contributing to human capital development. The study aims to empirically verify the existence of this interaction by carrying out a correlation analysis of the human capital development level among 120 countries, assessed by the Human Capital Index, and the world's national economic development level, as demonstrated by the Global Competitiveness Index, as well as the level of development of the world's nations (societies) as demonstrated by the Human Development Index.

The result of the analysis empirically demonstrated a strong link between the human capital development with the country's economic (r = +0.944, p = 0.000) and national development (r = +0.882, p = 0.000) in total by all countries. Nevertheless, carrying out the correlation analysis by groups of countries, which are divided according to the calculation methodology of the Global Competitiveness Index, depending on their stage of economic development, the relationship between human capital development and nation’s development is becoming weaker in some groups of countries, with the remaining strong correlation between the development of human capital and the economic development of a state in all groups of countries. This means that only highly developed human capital can contribute to the country's economic development, and vice versa, national economic performance increases human capital development in the framework of effective development policy. On the other hand, not always a close interaction between nation’s development and human capital development can be faced, since a highly developed human capital means the quality of the developed human capital

Downloads

Download data is not yet available.

References

A. Zobena, „Latvija. Pārskats par tautas attīstību 2006/2007. Cilvēkkapitāls: mans zelts ir mana tauta?” Rīga: LU Sociālo un politisko pētījumu institūts, 2007.

I. Mietule, “Theoretical aspects of human capital formation in the interaction between the economic and education sectors”, in Proceedings of the international scientific conference, Vol.1, Personality Socialization research institute of RHEI, 2011, pp. 359-368.

J. Lonska and V. Boronenko, “What is the Key Element for the Territory’s State of Development?”, in WASET International Conference on Environmental, Cultural, Economic and Social Sustainability (April 14-15, 2013, Venice, Italy) proceedings, Issue 76 April 2013 Venice, 2013, pp.187-192.

I. Mietule, “Selected Issues of the Meaning of Human Capital in Economic Development”, in Wydawnictwo Naukowe Uniwersytetu Mikolaja Kopernika, Torun, 2009, pp. 219-226.

У. Петти, Экономические и статистические работы. Москва: Соцгиз, 1940.

T. Schultz, “Capital formation by education”, in Journal of Political Economy, 68, 1960, pp. 571-583.

T. Schultz, “Investment in human capital”, in American Economic Review, Vol. 51, No. 1, 1961, pp. 1-17.

T. Schultz, The Economic Value of Education. New York: Columbia University Press, 1963.

T. Schultz, Investment in Human Capital: The Role of Education and of Research. New York: Free Press, 1971.

G. Becker, “Investments in Human Capital: A Theoretical Analysis”, in The Journal of Political Economy, Vol. 70, Issue 5, Part 2, 1962, pp. 9-49.

G. Becker, Human Capital: a Theoretical and Empirical Analysis, with special reference to education. National Bureau of Economic Research, New York: Columbia University Press, 1964.

B. Weisbrod, External Benefits of Public Education: An Economic Analysis. Industrial Relations Section, Department of Economics, Princeton University, 1964.

J. Mincer, “Investment in Human Capital and Personal Income Distribution”, in Journal of Political Economy, 66/4, 1958, pp. 281–302.

W. L. Hansen, “Education, Income, and Human Capital”, in Income and Wealth, No. 35, New York: National Bureau of Economic Research, 1971.

M. Blaug, “The Empirical Status of Human Capital Theory: A Slightly Jaundiced Survey”, in Journal of Economic Literature, Vol. 14, No. 3 (Sep., 1976), 1976, pp. 827-855.

R. Layard, “Human Capital and Earnings: British Evidence and a Critique”, in Review of Economic Studies, Wiley Blackwell, Vol. 46 (3), 1979, pp. 485-503.

M. C. Хараева, “Человеческий капитал - как фактор опережающего экономического развития”, in Креативная экономика, № 3 (27), 2009, pp. 20-27.

R. Florida, The Rise of the Creative Class, and How It’s Transforming Work, Leisure, Community and Everyday life. New York: Basic Books, 2002.

R. Florida, “Cities and the Creative Class”, in Cities & Community, 2(1), 2003, pp. 3-19.

World Economic Forum, The Human Capital Report 2013.

K. Malik, Human Development Report 2014. Sustaining Human Progress: Reducing Vulnerabilities and Building Resilience. United Nations Development Programme, 2014.

K. Schwab and X. Sala-i-Martin, The Global Competitiveness Report 2014-2015. World Economic Forum, 2014.

G. Ranis, F. Stewart and A. Ramirez, “Economic Growth and Human Development”, in World Development, Vol. 28, No. 2, 2000, pp. 197-219.

G. Ranis and F. Stewart, “Growth and Human Development: Comparative Latin American Experience” (Center Discussion Paper No. 826). Economic Growth Center, Yale University, 2001. [Online]. Available: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=275294. [Accessed: March 10, 2015].

A. Ramirez, G. Ranis, and F. Stewart, “Economic Growth and Human Development” (Working paper No.18), 1998. [Online]. Available: http://www.cs.odu.edu/~dlibug/ups/rdf/remo/qeh/qehwps/qehwps18.pdf. [Accessed: March 10, 2015].

N. Bundala, “Economic Growth and Human Development; A Link Mechanism: an Empirical Approach” (MPRA Paper47648). University Library of Munich, 2012. [Online]. Available: http://mpra.ub.uni-muenchen.de/47648/1/MPRA_paper_47648.pdf. [Accessed: March 10, 2015].

T. Suri, M. A.Boozer, G. Ranis, and F. Stewart, “Paths to Success: The Relationship between Human Development and Economic Growth”, in World Development, 39 (4), 2011, pp. 506–522.

P. Streeten, “Human Development: Means and Ends”, in Human Development, 84.2 (May 1994), 1994, pp. 232-237.

M. Boozer, G. Ranis, F. Stewart, and T. Suri, “Paths to Success: The Relationship between Human Development and Economic Growth”, (Discussion Paper No. 874). Economic Growth Center, Yale University, 2003. [Online]. Available: http://www.econ.yale.edu/growth_pdf/cdp874.pdf. [Accessed: March 10, 2015].

K. Malik, Human Development Report 2013. The Rise of the South: Human Progress in a Diverse World. United Nations Development Programme, 2013.

D. Rodrik, A. Subramanian, and F. Trebbi, “Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development” (NBER Working Paper 9305). The National Bureau of Economic Research, 2002. [Online]. Available: http://www.nber.org/papers/w9305. [Accessed: March 10, 2015].

R. Haufler and S. Andreas, Regional Integration and the Development of Tax Systems in the European Union. Oxford: Oxford University Press, 2001.

P. Romer, “Endogenous Technological Change”, in Journal of Political Economy, 98 (October), 1990, X71–S102.

D. Hendri, “Economic Competitiveness and Human Capital: A Nexus in Indonesian Case”, 2012. [Online]. Available: https://www.academia.edu/3432769/Economic_Competitiveness_and_Human_Capital. [Accessed: March 10, 2015].

Downloads

Published

2015-06-17

How to Cite

[1]
J. Lonska and I. Mietule, “The impact of human capital development on the economic and social development of a country: empirical study”, ETR, vol. 2, pp. 174–180, Jun. 2015, doi: 10.17770/etr2015vol2.268.