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Decomposing the relationship between human capital and GDP:an empirical analysis of Bangladesh

Author

Listed:
  • Nazneen Ahmad
  • Joseph J. French

    (Weber State University, USA
    University of Northern Colorado, USA)

Abstract

This paper dissects the relationship between human capital stock and real GDP per capita in Bangladesh using VEC and VAR techniques. Results show that GDP granger causes aggregate human capital stock. This paper constructs a measure of Bangladesh's human capital stock for the period of 1973-2004 using the perpetual inventory method. Innovations in secondary and higher secondary education are found to have the greatest short to medium-term impact on the country's real GDP. Consistently this research also finds evidence that the variance of the human capital sequence is strongly influenced by shocks to the GDP sequence, whereas the evolution of GDP over the medium term is relatively unaffected by shocks to aggregate human capital stock. These results show that increases in human capital tend to follow income. The findings of this research suggest that secondary and higher secondary education should be emphasized by Bangladesh.

Suggested Citation

  • Nazneen Ahmad & Joseph J. French, 2011. "Decomposing the relationship between human capital and GDP:an empirical analysis of Bangladesh," Journal of Developing Areas, Tennessee State University, College of Business, vol. 44(2), pages 127-142, January-M.
    • Handle: RePEc:jda:journl:vol.44:year:2011:issue2:pp:127-142
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    File URL: http://muse.jhu.edu/journals/journal_of_developing_areas/v044/44.2.ahmad.html
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    Cited by:

    1. Adejumo, Oluwabunmi O. & Asongu, Simplice A. & Adejumo, Akintoye V., 2021. "Education enrolment rate vs employment rate: Implications for sustainable human capital development in Nigeria," International Journal of Educational Development, Elsevier, vol. 83(C).
    2. Bahar Bayraktar-Sağlam Bayraktar-Sağlam, 2018. "Re-Examining Vicious Circles of Development: A Panel Var Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(1), pages 231-256, May.
    3. Yu Cheng Lin & Sang Do Park, 2023. "Effects of FDI, External Trade, and Human Capital of the ICT Industry on Sustainable Development in Taiwan," Sustainability, MDPI, vol. 15(14), pages 1-24, July.

    More about this item

    Keywords

    Human capital; education; GDP;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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