The Cumulative Effect of Human Capital on Economic Growth:

Abstract

This article studies the controversial relationship between human capital and growth through different channels using a cross-country panel approach applied for 104 countries, including 79 developing countries and 25 developed countries (OECD) during 1980-2011. The analysis yields important insights into the relationship between human capital and growth. Firstly, we find a significant relationship between high levels of human capital and technology adoption Secondly, considering the levels of human capital directly as a innovation component in the productivity function shows that there is a non-linear relationship between this factor and growth. The results provide a new understanding of this relationship and to some extent contradict some earlier studies.

Keywords

• Human capital
• Economic growth
• Panel approach