Human capital and economic growth: a review essay
Author:Marinko Škare and Sabina Lacmanović
JEL:E24, J24, O15, O40.
DOI:
Keywords:schooling, growth, human capital, growth models, knowledge economy
Abstract:
Human capital as a critical engine of economic growth is present in many empirical and
theoretical body of knowledge on growth models and theory. However, the conclusion on
its importance as a driver of economic growth remains inconclusive. The aim of this study
is to provide and detailed overview on theoretical and empirical research investigating the
role of human capital in the economic growth phenomena. Measuring human capital
remains the main obstacle to assessing the importance of human capital and education in
economic growth. The time lag present causes additional restrictions in the schooling
process itself which in the today dynamic and globalized world present a real obstacle to
measuring human capital role in growth models. Costs principle in measuring human
capital proxy may not be a best approach to use in growth accounting models. Other not
quantitative (subjective) factors affect human capital to a degree not less than quantitative
are like motivation, commitment, vision. These factors have to be accounted for if an
adequate fit for proxy of human capital in growth models in future prospective research on
endogenous growth models and theories.