The Contributions of Human Capital to the Philippine GDP Per Capita

Abstract

The Philippines suffered from learning loss due to school closures induced by the COVID-19 pandemic. The effects of the pandemic did not only anticipate in one direction as it posed a domino effect from one sector to another. Investing in human capital would help the country bounce back from such a loss (Sultana et al., 2022), yet it always costs a real expense (Brewer, Hentschke & Reide, 2010). To reduce the cost associated with education, the government must also boost employment (Atalay, 2015). With that, this paper aims to investigate the effects of human capital indicators determined by the World Economic Forum on Philippine GDP per capita from 1981 to 2020 for Education, from 2000 to 2020 for Health and Employment, and from 1998 to 2020 for Enabling Environment using Ordinary Least Squares Method. The findings revealed that seven sub-variables have positive effects on GDP per capita—Tertiary Enrolment Rates; Life Expectancy and Water, Sanitation, and Hygiene; Capacity for Innovation and Scientific-Technical Journal Articles; Mobile Users and Internet Users. While the rest have negative effects—Primary Enrolment Rate; Fertility Rate; Labor Force Participation; Social Mobility. The results suggest that the government prioritizes Enabling Environment and Health as these sectors need more assistance. Keywords: Contribution, Human Capital, Philippine, GDP Per Capita, Multiple Regression, EViews, Mean Imputation, Log Transformation