Role Of Human Capital In Economic Development

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Human capital has been identified as a key stimulus of economic development. The theoretical models of economic growth have underscored the role of human capital. The empirical analysis of growth for a broad group of countries shows that the school attainment has positive effect on growth. It has been widely observed that increases in national output have been large compared with the increases of land, man-hours, and physical reproducible capital. Investment in human capital is probably the major explanation for this difference. As an economic concept human capital is at least two centuries old, but its incorporation into the mainstream of economic analysis and research is a new and lively development of the past two decades.The need for this development became apparent in the 1950s, when the application of empirical economic research to the concerns about economic growth and about income distribution revealed major defects not only in our understanding of each but also in our way of thinking about these matters (Jacob Mincer, 1981). Many theoretical models of economic growth, such as those of Nelson and Phelps (1966); Lucas (1988); Becker, Murphy, and Tamura (1990); Rebelo (1992); and Mulligan and Sala-i-Martin (1992), have emphasized the role of human capital in the form of educational attainment. Empirical studies of growth for a broad cross-section of countries, such as those by Romer (1990a), Barro (1991), Kyriacou (1991), and Benhabib and Spiegel(1992), have used
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