Human Capital, Innovation and Economic Growth in the EU Countries

Elena Pelinescu, Carmen Pauna, Corina Saman and Tiberiu Diaconescu
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Carmen Pauna: Institute for Economic Forecasting, Romanian Academy.

Journal for Economic Forecasting, 2019, issue 4, 160-173

Abstract: The importance of human capital for development and innovation is shown by the multitude of studies dedicated to this subject. The paper follows the methodological path from Hanushek’s studies (2013) and Angel de la Fuente and Doménech (2000) adapted to the objective of an analysis at European Union level. The data was extracted form Eurostat database and the UNCTAD Human Development Report for 2019. We apply a mixed effect model with fixed and random effects allowing highlighting the total impact of human capital, variable proxied by the average of years of education. The coefficient for the human capital was found 0.2586, in average, but different for each country. This result is closer to the estimation of Mankiew, Romer and Weil’s study (1992), which found an influence of 49%, lower than the long-term effect of 66% highlighted in the studies conducted by Portela et al. (2004) and by Teulings and Van Rens (2002. Moreover, the model also showed an indirect positive effect for improving the economic growth of human capital, evidenced by its capacity for innovation. The indicators used in this case are the expenditures for research and development per capita and the number of patents applied.

Keywords: Human Capital; Innovations; Economic growth; Mixed-effect models (search for similar items in EconPapers)
JEL-codes: I25 O12 O15 O31 O47 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2019:i:4:p:160-173

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