Measuring the impact of human capital on economic growth: A comparative study (Saudi Arabia-Iraq)

Abstract

Economic growth is one of the basic macroeconomic variables that all countries of the developed and developing world seek to achieve, and since rentier countries are exposed to imbalances in their economies according to changing oil prices and global economic and political conditions, so the research aimed to analyze the relationship between economic growth and human capital in Saudi Arabia and Iraq, and showing which one is more effective than the other by estimating the impact of human capital on economic growth, and comparing them using the Lucas model. The study showed that the relationship between human capital and average years of schooling is strong in the Saudi model, and weak in Iraq. There is also a reciprocal causal relationship between economic growth and human capital in Iraq and Saudi Arabia. The study found that there is a direct relationship between human capital and economic growth in Saudi Arabia, and this is consistent with the logic of economic theory, and there is an inverse relationship between human capital and economic growth in Iraq, and this is contrary to the logic of economic theory, so the study recommended a re-evaluation of the scientific reality through the evaluation of certificates and the development of a plan For the next ten years with regard to the primary and higher studies in Iraq, as for Saudi Arabia, it should go more towards diversifying its sources of revenue in a way that reduces its dependence on oil revenues.

Keywords

• Economic growth, Lucas model, human capital as an endogenous variable, average years of schooling.