Human Capital as a Determinant of Long-Term Economic Growth

Human Capital as a Determinant of Long-Term Economic Growth

Siriwan Saksiriruthai (Suan Sunandha Rajabhat University, Thailand)
Copyright: © 2018 |Pages: 16
DOI: 10.4018/978-1-5225-3856-1.ch013
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Abstract

This chapter aims to investigate the importance of human capital as a key success factor to economic growth and modern economic reforms as well as exploring determinants of human capital. Then factors influencing human capital accumulation as well as case studies are discussed to illustrate the influence of human capital to economic growth and reforms. Together with economic reforms, supportive education and human capital development policies, some countries could generate a dramatic technology and economic development. Currently, human capital even becomes crucial because of this technological progress. Thus, modern economic reform needs more intense human capital accumulation to cope with more advanced technology. In this chapter, we investigate the role of human capital accumulation by education and migration process in economic reforms and development of three countries with completely different conditions of economic development.
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Human Capital: A Key Of Successful Economic Development

Human capital is referred to abilities and skills of human resources of a country (Eigbiremolen & Anaduaka, 2014). Also, human capital is defined as a set of skills and competences possessed by the labour force and which have a direct positive effect on the level of economic development (Olimova, 2010). With the combination of knowledge, skills and abilities, a person could improve his or her productivity and become valued human capital, which could finally contributes to economic development. A country with human capital accumulation is able to achieve higher level of economic development. In research studies, years of education are the proxy of human capital accumulation. Higher educated people earn comparative advantage in understanding and adapting technology and ideas into production process (Ogujiuba & Adeniyi, 2005).

There are a number of studies that link the economic growth to human capital accumulation. According to Growth Theory, human capital plays a key role in accelerating economic growth (e.g., Lucas, 1988 and Mankiw, Romer & Weil, 1992), numerous evidences indicate that long-term economic development has to be associated with human capital accumulation (e.g., Benhabib & Spiegel, 1994 and Asian Development Bank, 2015).

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