Human capital and human development: an empirical analysis

Abstract

A key underlying factor which boosts rapid Economic Growth is factor productivity and new world trend moves toward value added manufacturing which relies on human resource. Thus as productivity drivers Human Development and Human Capital take prime concern in Development Economics and This paper on Human Capital And Human Development: An Empirical Analysis, investigates the interrelationship between Accumulations of Human Capital and Human Development using Simple Regression Analysis by employing Ordinary Least Square method. And Generalized Least Square Method used to resolve autocorrelation problem, raised in the data set. This paper uses Human Capital Index to measure Human Capital accumulation and Human Development Index to measure Human Development. The data has been extracted from Human Development reports, Published by United Nations Development Program and Human Capital Report, published by World Economic Forum. With available data 122 countries are included in the study. This research concludes that there is a strong positive two way relationship between Human Development and Human Capital. In case of Advanced Economies, rather than Human Capital, there are more influential variables which determine the Human Development and vice versa. In case of Emerging Market and Developing Economies, the regression results show that the explanatory variable, Human Capital shows a strong relationship with Human Development and there is no variation among countries with geographical region.