The Effect of Human Capital Accumulation and Education on Economic Growth

Abstract

The characteristic of human capital along with other social elements play an important role in the economic output of an economy and its always being under discussion by politicians, economists, and policymakers. According to human capital definition, education, work
experience, formal training on the job, and skills with taking goals for training which is provided by family members to expand their capability and non-formal learning, all these investments also include in people expertise and all other actions that help to people in
enhancing the productivity. There are many studies contributed in economics literature but they only focused on specific elements or regions, but this study explores the immediate impact of human capital accumulation with labor force, education expenditure trade
openness, and investment on consequent economic output in terms of GDP. Current study was based on a sample of 180 developed and developing countries across the world from the period of 1981 to 2012. We employed fixed and random effects models on panel data to examine the human capital accumulation effect on economic growth. It was found that additional expenditure on public or private education, leads to enhance the education quality that increases the number of skilled labors and these labors increase the
productivity. capital trade openness and Investment in fixed also has a significant and positive influence on economic output. In sum, the validity and availability of data of several developmental interventions are highlighted. It will be helpful for policymakers with paying attention to the relative effectiveness of these interventions on various relevant outcomes about spending on education for skilled labor and constructive economic growth.