The Impact of Human Capital on Economic Growth: Evidence from Selected Asian Countries

Jangraiz Khan


The aim of this paper is to find out the role of human capital in economic growth of selected Asian countries namely Pakistan, India, Bangladesh and Sri Lanka. It is based on time series data for the period 19712013. Ordinary Least Squares (OLS) and Cointegration have been used as analytical techniques for this purpose. The results obtained through Ordinary least Squares show that human capital in form of education affects economic growth in all selected countries except India. The relationship is positive and statistically significant. Moreover, physical capital is another significant determinant of economic growth in the study area. When education is replaced by health as human capital, the OLS results demonstrate a little change showing human capital a significant determinant of economic growth but physical capital in case of India becomes insignificant. In order to avoid the doubt of spurious regression, stationarity was checked by using the Augmented Dickey-Fuller (ADF) test and long-run relationship was analyzed by conducting Johansen Cointegration Test. The Cointegration test results confirmed the existence of long run relationship in human capital (education) and economic growth in Pakistan and Bangladesh. Moreover, there is long run association between human capital in form of health and economic growth in Pakistan, India and Bangladesh. It is therefore concluded that human capital in form of health and education is an important determinant of GDP per capita in most of selected countries. It is, therefore suggested to focus on health and education to reap the economies of sustained economic growth.


Human Capital; Economic Growth; Health; Education; South Asia

Full Text:

PDF Remote


Abbas, Q., (2001). Endogenous growth and human capital: a comparative study of Pakistan and Sri Lanka, The

Pakistan Development Review, 40 (4), Part II, 987–1007

Aturupane, H., S.Yevgeniya, S. Mari, L. Kurt (2014), Sri Lanka :Investment in human capital, World Bank.

Working Paper No.89923

Azam, M. and Ather, M. A. (2015). Role of Human Capital and Foreign Direct Investment in Promoting

Economic Growth: Evidence

from Commonwealth of Independent States. International Journal of Social Economics, 42(2), 98-111

Barro, R, J., (1991). Economic Growth in Cross-Section of Countries”, The Quarterly Journal of Economics,

(2), 407-443

Barro, R. J., & X. S. Martin (2004).Economic Growth. Massachusetts Institute of Technology press, 2



Khan, Malik, Arafat

Becker, G. S., (1993). Human Capital-A theoretical and Empirical Analysis, with Special References to

Education (3rd edition), The University of Chicago Press, Chicago and London.

Benhabib, J., and Spiegel, M., (1994).The Role of HumanCapital in Economic Development: Evidence from

Aggregate Cross Country Data. Journal of Monetary Economics, 34, 143-173.

Cooray, A. V., (2009). The role of education in economic growth. Proceedings of Australian Conference of

Economists, pp.1-27, South Australian Branch of the Economic Society of Australia, Adelaide,


Gemmel ., N (1996). Evaluating the Impacts of Human Capital Stocks and Accumulation on Economic Growth:

Some New Evidence.Oxford Bulletin of Economics and Statistics, 58, 9-28.

Khan, J. (2012).The Role of Human Capital in Economic growth of Pakistan (1971-2008), Ph. D in Economics

Thesis Submitted to Department of Economics, University of Peshawar, Pakistan.

Khan & Naeem, U.R., (2013).The Significance of Research And Development For EconomicGrowth: The Case

of Pakistan’, City University Research Journal, 3 (2)

Khan, J., N.U.R. Khattak&A.Khan (2015), Human Capital-Economic Growth Nexus: acausality analysis for

Pakistan. City University Research Journal,Vol. 5 (2 )

Khan, J., & Z. K. Malik (2015), Education-Economic Growth Nexus: A Review, Economic and Social

Thought, 2 (2)

Khattak, N.U.R &Khan, J ., (2012a). The Contribution of Education to Economic Growth: Evidence from

Pakistan. International Journal of Business and Social Science, 3 (4), 145-151

Khattak, N.U.R & J. Khan . (2012b). Does Health Accelerate Economic Growth in Pakistan?,International

Journal of Asian Social Science, 2 (4), 506-512.

Krueger, A., andLindahl, M., (2001).Education and Growth: Why and for Whom? Journal of Economic

Literature, 39, 1101-1136.

Romer. P. M. (1986). Increasing Returns and Long-Run Growth .The journal of Political Economy, 94 (5),

-1037. The University of Chicago Press.

Lucas, R., Jr. (1988). On the Mechanics of Economic Erowth.Journal of Monetary Economics, 22, 3-22, North


Ramsey, F. (1928).A Mathematical Theory of Saving.Economic Journal, 38, 543–559.

Ricardo, D. (1817). On the Principles of Political Economy and Taxation.Cambridge: Cambridge University

Press, 1951.

Schumpeter, J. A. (1934). The Theory of Economic Development.Cambridge, MA: Harvard University Press.

Smith, A., (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. New York: Random House,

Sharif et al (2013), Human Resource Development and Economic Growth in Bangladesh : An Econometric

Analysis, European Journal of Business and Management, 5 (7)


Solow. R. M. (1956) A Contribution to the Theory of Economic Growth, The Quarterly Journal of Economics,

(1), 65-94

Swan, Trevor. W., (1956) Economic Growth and Capital Accumulation, Economic Record, 32 (2), 334-361

Temple., J (2001). Growth Effects of Education and Social Capital in OECD Countries, Economic Studies, 33,

-101 World Development Indicators (2010), World Bank

Young, A (1928). Increasing Returns and Economic Progress. Economic Journal, 38, 527–542.


  • There are currently no refbacks.

ISSN 2521 – 5515