Impact of Human Capital on Employment and Economic Growth in Developing Countries

Abstract

Human Capital plays a vital role in increasing GDP growth and creating more employment opportunities. The major objective of this research paper is to analyze the impact of Human Capital on GDP Growth and Employment in developing countries using Panel Data for the period of 1996-2018. To measure the Human Capital, we have employed two proxy variables i.e. life expectancy and education expenditure. The variables of Labour force, capital formation, inflation, agriculture and manufacturing value added are used as controlled variables in the study. The fixed effect and random effect models are used in this study. The empirical results show that human capital variables (life expectancy and education expenditures) are found significant and hence contribute as an engine of growth and employment opportunities in developing countries