A Human Capital Effect on Economic Growth: A Case Study of Korea

human capital

Abstract

Present study examined the impact of human capital on economic growth in Korea. The annual time series data used from 1985 to 2018. In this research, the study applied Ordinary Least Square (OLS) method to estimate the impact of human capital on economic growth. The results show that there is a positive and significant impact of human capital on economic growth in Korea. Furthermore, Foreign direct investment and domestic investment both have a positive and significant impact on economic growth. Similarly, Labor force participation rate, saving and Trade are positively related to economic growth in Korea. The interaction effect of FDI*HC, DI*HC and HC*Trade show that human capital strengthen the impact of investment and trade on economic growth in Korea. The findings suggest that greater the investment on human capital and technology improves the productivity and economic growth in Korea.