The relationship between employed human capital and economic growth: A panel data analysis for OECD countries

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Thesis Type: Postgraduate

Institution Of The Thesis: Eskisehir Osmangazi University, SOSYAL BİLİMLER ENSTİTÜSÜ, Turkey

Approval Date: 2018

Thesis Language: Turkish

Student: HALİL GÜLEN

Supervisor: Esin Kılıç

Abstract:

Ever since economics became a science, the concept of economic growth and its determinants have always been an issue of concern by economists. The policymakers aim to increase both welfare and economic growth in their countries in the light of the different economic perspectives shaped by various economic schools. Until the endogenous growth models claiming that economic growth depends on internal factors, the common paradigm accepting capital stock and number of labour as the unique factors of production had regulated the discipline of economic growth. With the development of endogenous growth model, it has been argued that human capital is a determinant of the economic growth and affects economic growth by increasing productivity in production. Since 1980s, some economists have investigated how human capital affects economic growth and some empirical findings are revealed. In this context, researching and revealing the relationship between human capital and economic growth are rather important in terms of both giving policy makers an idea and increasing the welfare and economic growth. This thesis examines the relationship between employed human capital and economic growth for 28 OECD countries during the period 1999-2014 by panel data analysis. In the analysis, the ratio of employment with intermediate and advanced education level to total employment, the ratio of employment with intermediate education level to total employment, and the ratio of employment with advanced education level to total employment were used as the employed human capital criterion. As a result of the econometric analysis, it was revealed that employed human capital is a determinant of long-term economic growth for the developed countries in the relevant period, but there is not enough evidence to show that there is a significant relationship between employed human capital and real GDP in the short term. Based on the finding that there is a long-term positive relationship between the employed human capital and economic growth, it can be said that supporting education policies with employment policies can contribute to economic growth in developed countries.