An Empirical Analysis of the Contribution of Human Capital and Physical Capital to Economic Growth: Celebrating the 60th Anniversary of Human Capital Theory

doi:10.16382/j.cnki.1000-5560.2020.10.002

Abstract

Abstract: The comparison of the contribution of human capital and physical capital to economic growth is a core issue of economics of education. We use traditional GDP and green GDP to measure economic growth, adopt panel data from 143 countries and regions from 1990 to 2014, introduce human capital into the Solow model to compare the output elasticity of human capital and physical capital and analyze their elastic ratios at different economic levels and different industrial structures. The result shows that both traditional GDP and green GDP are more flexible to human capital than to physical capital. Also, compared with traditional GDP, green GDP, which reflects the level of sustainable economic development, is more sensitive to the changes of human capital, especially when it is an economy in a more developed stage. This research provides an empirical basis for a deeper understanding of the role of human capital in economic growth.

Key words: economic growth, physical capital, human capital, output elasticity, Solow model

Huang Yifan, Ding Xiaohao, Chen Ran, Min Weifang. An Empirical Analysis of the Contribution of Human Capital and Physical Capital to Economic Growth: Celebrating the 60th Anniversary of Human Capital Theory[J]. Journal of East China Normal University(Educational Sciences), 2020, 38(10): 21-33.

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