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Economies 2018, 6(1), 2; doi:10.3390/economies6010002

Human Capital, Social Capabilities and Economic Growth

1
The World Bank, Islamabad, Pakistan
2
Science Policy and Innovation Studies, National Centre for Technology Management, Ile-Ife 220005, Nigeria
3
Applied Economics Research Center, University of Karachi, Karachi 75270, Pakistan
This paper is an extended version of our paper published in 30th Annual General Meeting, Pakistan Institute of Development Economics, Islamabad, Pakistan and Working paper no. 2016-013 in Jena Economic Research Papers, University of Jena, Jena, Germany.
*
Author to whom correspondence should be addressed.
Received: 29 September 2017 / Revised: 21 December 2017 / Accepted: 25 December 2017 / Published: 2 January 2018
(This article belongs to the Special Issue The Role of Education and Health in Economic Development)
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Abstract

Theoretically, human capital is conclusively believed to be positively related with economic growth. While empirically, the said relationship does not always hold for several reasons. Thus, the current paper presents new results on a set of conditions under which human capital is robustly and positively associated with economic growth. Using data for 132 countries over 15 years, the empirical results reveal that human capital plays a positive role in per capita GDP growth only in the presence of better economic opportunities and high-quality legal institutions. In fact, economic opportunities reinforce the effect of human capital on growth: the easier it is to do business and trade domestically or internationally, the stronger the effect of human capital on growth. In conclusion, the findings suggest that inconclusive results in previous empirical studies on human capital and growth might be due to omitted variable bias as these studies do not include variables related to social capabilities. View Full-Text
Keywords: human capital; economic growth; economic opportunities; social capabilities human capital; economic growth; economic opportunities; social capabilities
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Ali, M.; Egbetokun, A.; Memon, M.H. Human Capital, Social Capabilities and Economic Growth. Economies 2018, 6, 2.

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