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Human capital and growth empirics

Author

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  • Chandra Shekhar Kumar*

    (Cornell University, USA)

Abstract

In this paper I attempt to understand the empirics of human capital (schooling attainment here) and economic growth under the framework of neoclassical growth model and later endogenizing the technological progress as a function of stock value of human capital. Various econometric methodologies have been used to overcome estimation problems involved here - such as omitted variable bias, endogeneity of independent variables, and weak instruments problem. I used panel data method, Difference GMM method, and System GMM method respectively to overcome the above problems. In all the above estimation methodologies, the positive and significant effect of human capital is not observed. The paper concludes with the observations that significance of human capital may be understated, because of (i) inappropriate specification of human capital production function, (ii) inappropriate estimation methodologies, (iii) not controlling for variables related to governance, institutions, etc. Hence further research works on these points may help in appropriately estimating the significance of human capital in growth empirics.

Suggested Citation

  • Chandra Shekhar Kumar*, 2006. "Human capital and growth empirics," Journal of Developing Areas, Tennessee State University, College of Business, vol. 40(1), pages 153-179, September.
    • Handle: RePEc:jda:journl:vol.40:year:2006:issue1:pp:153-179
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    Citations

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    Cited by:

    1. Abdul Wahab, Abdul Azeez Oluwanisola & Kefeli, Zurina & Hashim, Nurhazirah, 2018. "Investigating The Dynamic Effect of Healthcare Expenditure and Education Expenditure On Economic Growth in Organisation of Islamic Countries (OIC)," MPRA Paper 90338, University Library of Munich, Germany, revised 19 Oct 2018.
    2. Bethencourt, Carlos & Perera-Tallo, Fernando, 2020. "Human Capital, Economic Growth, and Public Expenditure," ADBI Working Papers 1066, Asian Development Bank Institute.
    3. Merna Mohamed Esmat Hefnawi & Hebatallah Ghoneim, 2020. "Human Capital and Economic Growth in Egypt," Proceedings of Business and Management Conferences 10112451, International Institute of Social and Economic Sciences.
    4. M. Emranul Haque, 2012. "Unproductive Education in a Model of Corruption and Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 178, Economics, The University of Manchester.
    5. M. Emranul Haque & Babar Hussain, 2013. "Unproductive Education in a Model of Corruption and Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 179, Economics, The University of Manchester.
    6. Faiza A. Khan, 2014. "Economic Convergence in the African Continent: Closing the Gap," South African Journal of Economics, Economic Society of South Africa, vol. 82(3), pages 354-370, September.
    7. Glawe, Linda & Wagner, Helmut, 2022. "Is schooling the same as learning? – The impact of the learning-adjusted years of schooling on growth in a dynamic panel data framework," World Development, Elsevier, vol. 151(C).

    More about this item

    Keywords

    Human Capital; Economic Growth; Fixed Effect; GMM;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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