Human Capital and Macro-Economic Development: A Review of the Evidence

Federico Rossi ()

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: The role of human capital in facilitating macro-economic development is at the center of both academic and policy debates. Through the lens of a simple aggregate production function, human capital might increase output per capita by directly entering in the production process, incentivising the accumulation of complementary inputs and facilitating the adoption of new technologies. This paper discusses the advantages and limitations of three approaches that have been used to evaluate the empirical importance of these channels: cross-country regressions, development accounting and quantitative models. The key findings in the literature are reviewed, and some of them are replicated using updated data. The bulk of the evidence suggests that human capital is an important determinant of cross-country income gaps, especially when its measurement is broadened to go beyond simple proxies of educational attainment. The paper concludes by highlighting policy implications and promising avenues for future work.

Keywords: Human Capital; Development; Growth JEL codes: E24; O11; O47; I25 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-gro, nep-mac and nep-pke
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Citations: View citations in EconPapers (4)

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https://warwick.ac.uk/fac/soc/economics/research/w ... erp_1246_-_rossi.pdf

Related works:
Working Paper: Human Capital and Macro-Economic Development: A Review of the Evidence (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1246

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