Human Capital and Growth
One ubiquitous element of both theoretical and empirical analyses of economic growth is the role of human capital. The skills of the population enter into both neoclassical and endogenous growth models. The most commonly used measure of human capital is the level of school attainment in a country, building upon the data development of Robert Barro and Jong-Wha Lee. This measure of human capital, however, requires the strong assumption that what is learned in a year of schooling is the same across all countries. It also presumes that human capital is only developed in formal schooling, contrary to the extensive evidence that families, neighborhoods, peers, and health also contribute to the development of human capital. In order to measure human capital more accurately, Eric Hanushek and Dennis Kimko introduced measures of mathematics and science skills from international assessments into growth analysis. They found that quality of human capital was very significantly related to economic growth. This approach has been extended by a variety of authors, and the evidence indicates that economic growth is very closely related to the cognitive skills of the population.
Read more about this topic: Economic Growth
Famous quotes containing the words human, capital and/or growth:
“Writing fiction has developed in me an abiding respect for the unknown in a human lifetime and a sense of where to look for the threads, how to follow, how to connect, find in the thick of the tangle what clear line persists. The strands are all there: to the memory nothing is ever really lost.”
—Eudora Welty (b. 1909)
“The great dialectic in our time is not, as anciently and by some still supposed, between capital and labor; it is between economic enterprise and the state.”
—John Kenneth Galbraith (b. 1908)
“The English countryside, its growth and its destruction, is a genuine and tragic theme.”
—E.M. (Edward Morgan)