The Relationship between Economic Growth and Human Capital in Developing Countries

Journal article | Zeitschriftenartikel

This paper investigates the causal relationship between education and GDP in developing countries by using panel unit root tests and panel cointegration analysis for the period 1970-2010. A three-variable model is formulated with capital formation as the third variable. The results show a strong causality from investment and economic growth to education in these countries. Yet, education does not have any significant effects on GDP and investment in short- and long-run. It means that it is the capital formation and GDP that drives education in mentioned countries, not vice versa. So the findings of this paper support the point of view that it is higher economic growth that leads to higher education proxy. It seems that as the number of enrollments raise, the quality of the education declines. Moreover, the formal education systems are not market oriented in these countries. This may be the reason why huge educational investments in these developing countries fail to generate higher growth. By promoting practice-oriented training for students particularly in technical disciplines and matching education system to the needs of the labor market, it will help create long-term jobs and improve the country’s future prospects.

Object Details

• ISSN: 2300-2697
• Extent: Seite(n): 55-62
• Language: Englisch
• Notes: Status: Veröffentlichungsversion; begutachtet (peer reviewed)

References and Relationships

• Bibliographic citation: International Letters of Social and Humanistic Sciences(5)

Classification and Topics

• Subject: Wirtschaft ; Bildung und Erziehung ; Volkswirtschaftstheorie ; Allgemeines, spezielle Theorien und Schulen, Methoden, Entwicklung und Geschichte der Erziehungswissenschaft ; Wirtschaftswachstum ; Entwicklungsland ; Bruttoinlandsprodukt ; Entwicklungsländerforschung ; Humankapital ; Bildungsniveau ; Kapitalbildung

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Musai, Maysam ; Mehrara, Mohsen
• Event: Veröffentlichung
• (who): SciPress
• (where): Schweiz
• (when): 2013

Further information

• DOI: https://doi.org/10.18052/www.scipress.com/ILSHS.5.55
• Rights: GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
• Last update: 21.06.2024, 4:27 PM CEST