Parika, Ayushi and Singh, Bhanu Pratap (2020): How Does Human Capital Affect Economic Growth in India? An Empirical Analysis.
Preview |
PDF
MPRA_paper_102428.pdf Download (565kB) | Preview |
Abstract
The study attempts to examine the relationship between human capital and economic growth in India. The study utilizes annual time series data for the period 1980 to 2017. Real Gross Domestic Product is used as a proxy for economic prosperity and the Human Capital Index is taken as a proxy for the level of human capital. Conventional sources of growth are controlled by physical capital, trade openness and inflation. Johansen Cointegration and Fully Modified Ordinary Least Square (FMOLS) techniques are applied to look into a long-run equilibrium relationship. Toda and Yamamoto (1995) Granger's causality test is used as a short-run diagnostic test for the long-run equilibrium relationship. The major findings of the study suggest human and physical capital is the major determinant of economic development in the long-run, whereas in the short-run the level of economic prosperity determines the level of human and physical capital, the volume of trade and fiscal space of the government.
Item Type: | MPRA Paper |
---|---|
Original Title: | How Does Human Capital Affect Economic Growth in India? An Empirical Analysis |
English Title: | How Does Human Capital Affect Economic Growth in India? An Empirical Analysis |
Language: | English |
Keywords: | Human Capital, Economic Growth, India, FMOLS |
Subjects: | I - Health, Education, and Welfare > I2 - Education and Research Institutions > I25 - Education and Economic Development I - Health, Education, and Welfare > I2 - Education and Research Institutions > I28 - Government Policy O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration |
Item ID: | 102428 |
Depositing User: | Dr. Bhanu Pratap Singh |
Date Deposited: | 15 Aug 2020 14:33 |
Last Modified: | 15 Aug 2020 14:33 |
References: | Aisen, A., & Veiga, F.J. (2013). How does political instability affect economic growth. Eur. J. Political Econ, 29, 151–167. Arora, A., Florida, R., Gates, G. J., & Kamlet, M. (2000). Human capital, quality of place, and location. Pittsburgh, PA: Carnagie Mellon University. Arora, S. (2001). Health, human productivity, and long-term economic growth. The Journal of Economic History, 61(3), 699-749. Becker, G., 1962. Investment in human capital: a theoretical analysis. J. Political Econ. 70, 9–49 (5, part 2) Barro, R. J. (1991). Economic Growth in A Cross Section of Countries. The Quarterly Journal of Economics, 106, 407– 443. Barro, R. J., & Lee, J. W. (2000). International Data on Educational Attainment: Updates and Implications. Center for international development at Harvard University: CID Working paper 42. Cambridge, MA. Benhabib, J., & Spiegel, M. M. (1994). The role of human capital in economic development evidence from aggregate cross-country data. Journal of Monetary economics, 34(2), 143-173. Bloom, D. E., Sachs, J. D., Collier, P., & Udry, C. (1998). Geography, demography, and economic growth in Africa. Brookings papers on economic activity, 02, 207-295. Caselli, F., Coleman, I. I., & John, W. (2006). The world technology frontier. American Economic Review, 96(3), 499-522. Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American statistical association, 74(366a), 427-431. Hanushek, E.A., & Wößmann, L. (2012). Schooling, educational achievement, and the Latin American growth puzzle. J. Dev. Econ., 99 (2), 497–512. Haldar, S. K., & Mallik, G. (2010). Does human capital cause economic growth? A case study of India. International Journal of Economic Sciences & Applied Research, 3(1). Haldar, S. (2008). Effect of Health Human Capital Expenditure on Economic Growth in India: A State Level Study. Asia-Pacific Social Science Review, 8(2). Hanushek, E.A. & Wößmann, L. (2012). Schooling, educational achievement, and the Latin American growth puzzle. J. Dev. Econ., 99 (2), 497–512 Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of economic dynamics and control, 12(2-3), 231-254. Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration—with applications to the demand for money. Oxford Bulletin of Economics and statistics, 52(2), 169-210. Lucas, R. (1988). On the mechanics of economic development. Journal of monetary economics. Mankiw, N. G., D. Romer, & Weil, D. N. (1992). A Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics, 107 (2), 407–437. Mayer-Foulkes, D. (2008). The human development trap in Mexico. World development, 36(5), 775-796. Pritchett, L. (1997). Divergence, big time. Journal of Economic perspectives, 11(3), 3-17. Pedroni, P. (1996). Fully modified OLS for heterogeneous cointegrated panels and the case of purchasing power parity. Manuscript, Department of Economics, Indiana University, 5, 1-45. Rosen, S. (1976). A theory of life earnings. Journal of Political Economy, 84(4, Part 2), S45-S67. Romer, P. M. (1989). Human capital and growth: theory and evidence (No. w3173). National Bureau of Economic Research. Sehrawat, M., & Singh, S. K. (2019). Human capital and income inequality in India: is there a non-linear and asymmetric relationship? Applied Economics, 51(39), 4325-4336. Robert C., Robert Inklaar, & Timmer, M. P. (2015). The Next Generation of the Penn World Table" American Economic Review, 105(10), 3150-3182. Sala-i-Martin, X., G. Doppelhofer, & Miller, R. (2004). Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach, American Economic Review, 94 (4), 813–835. Stark, O., & Wang, Y. (2002). Inducing human capital formation: migration as a substitute for subsidies. Journal of Public Economics, 86(1), 29-46. Siddiqui, A., & Rehman, Atiq ur (2017). The human capital and economic growth nexus: in East and South Asia, Applied Economics, 49(28), 2697-2710. Singh, B. P. (2019). Does Governance Matter? Evidence from BRICS. Global Business Review, 0972150919861222. Singh, B.P. & Pradhan, K.C. (2020). Institutional Quality and Economic Performance in South Asia. Public Affairs. (Forthcoming) Toda, H. Y., & Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of econometrics, 66(1-2), 225-250. UNDP (2019) Human Development Report. http://hdr.undp.org/en/content/2019-human development-index-ranking |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/102428 |