An Empirical Evidence of Human Capital Constraint towards Economic Growth

Abstract

Human capital plays a crucial role in enhancing sustainable economic growth. The aim of this study is to investigate the long run linkage between economic growth and human capital and explore the problems facing by education and health sectors in Pakistan, how to remove these problems in order to increase Human Capital, eminence of Human Capital and Economic Growth also. For this purpose, this study has been taken annual time series data from 1977 to 2014 and employed co-integration technique to find out the results. This study has been used the data from WDI, SBP, and Economic Survey of Pakistan (various issues). The results of this study revealed strong positive and significant long run association between human capital and economic growth in Pakistan. It is also found by the study that current status of health and education sectors in Pakistan is very poor. This study may be useful for health and educational policy making and human capital formation to boost up economic growth in Pakistan.

Keywords: Human capital, Economic Growth, Johansen Co-integration, Skilled Worker.