The Relationship between Human Capital and Economic Growth: Cases of BRICS Countries and Turkey

Abstract

Endogenous growth theories have implied that human capital is an important factor that determines economic growth. This implication has revealed the need for policies that involving human capital as well as classical production factors. This means, physical capital is not enough alone for economic growth. This study aims to analyze the causality between human capital and economic growth in Turkey and BRICS countries. To this aim, by using Panel Data Analysis, which is an important econometric technique, the degree of the relationship between growth and human capital, in the long run, between the years 1995-2011 is analyzed. As a consequence of the analysis we expect to conclusion that there’s a positive and the high correlation relationship between human capital and economic growth. In our analysis, we obtained the result that, there’s a long-run relationship between human capital and economics growth in BRICS countries and Turkey. In this context, we came to the conclusion that human capital is an important factor that stimulate economic growth.