The Relationship Between the Human Capital and Economic Growth: A Case of Vietnam

Abstract

Human capital are not only the engine of economic growth but also increase the global competitiveness for countries. Improving labor quality helps countries improve long-term economic efficiency. This article uses annual data in the period 1990 - 2017 in Vietnam, which attempts to explore the relationship between total capital formation, the labor quantity, education levels and life expectancy with economic growth. By using OLS regression, the analysis results shown that the gross capital formation, the labor quantity, education levels and life expectancy are positive and have a significant impact on GDP in Vietnam. Furthermore, the Granger causality test indicates that there is a two-way causal relationship between labor and economic growth (GDP) in Vietnam.

Keywords: Human capital, Economic growth, Education levels, Granger causality

DOI: 10.7176/IEL/9-5-04

Publication date:June 30^th 2019