tailieunhanh - The role of human capital in economic growth in coastal provinces of Southern Central Vietnam

To examine the role of human capital in economic growth in coastal provinces of Southern Central Vietnam (SCV), the research employs data from balance sheets of eight provinces in this region and a neoclassical growth model with an extended Cobb-Douglas production function including the following variables. | 2 | Hạ Thị Thiều Dao & Nguyễn Đăng Khoa | 02 - 19 The Role of Human Capital in Economic Growth in Coastal Provinces of Southern Central Vietnam Hạ Thị Thiều Dao Banking University HCMC – daohtt@ Nguyễn Đăng Khoa Bình Thuận Community College – ARTICLE INFO ABSTRACT Article history: Received: Dec. 12 2013 Received in revised form Jan. 24 2014 Accepted: June 30 2014 To examine the role of human capital in economic growth in coastal provinces of Southern Central Vietnam (SCV), the research employs data from balance sheets of eight provinces in this region and a neoclassical growth model with an extended Cobb-Douglas production function including the following variables: output, capital, labor, human capital and other macroeconomic variables that have effects on economic development. The estimation results based on the fixed effect model show that the economic growth is affected by capital, labor, human capital, FDI, public expenditure, and agricultural production. Of this variable, the human capital is represented by average schooling year of laborers with an estimated effect of nearly per a one-percent increase in the average schooling year. Keywords: human capital, economic growth, education, labor quality JED July 2014| 3 1. PROBLEM STATEMENT Theoretically, human capital reflects qualitative and quantitative contribution from human labor to economic growth. Results of empirical researches, however, show a disagreement over tests for relationship between human capital and economic growth. UNDP (2011) confirms that “Health care and education are keys to human development” but “educational and health care progress is not always associated with increases in income.” Permani (2009) demonstrates a causal relationship between human capital and economic growth while Leeuwen (2004) shows that this relationship is not clear. That is why Romer (1990) warns that explanation of .