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Human Capital Formation and Economic Development in Pakistan: An Empirical Analysis
Actual Problems of Economics (2012)
  • Muhammad Irfan Chani
  • Mahboob Ul Hassan
  • Muhammad Shahid
Abstract
This study investigates the casual relationship between economic development and formation of human capital in Pakistan. Based on endogenous growth theory, this study empirically tests the standard growth model consisting of gross domestic product (GDP) per capita as a dependent variable and human capital formation, investment in physical capital and labor force as independent variables. Autoregressive distributive lag (ARDL) bound testing approach to cointegration is used to check the long-run equilibrium relationship between the variables included in the model. For checking the causal relationship between economic development and human capital formation, pair-wise Granger causality test is used for time series data (1972 to 2009). The results of the cointegration show that the variables are cointegrated. They have long-run stable equilibrium relation- ship. The results of the causality test show a bidirectional causal relationship between economic development and human capital formation.
Keywords
  • human capital formation; physical capital; welfare; education; health; labor force
Publication Date
June, 2012
Citation Information
Muhammad Irfan Chani, Mahboob Ul Hassan and Muhammad Shahid. "Human Capital Formation and Economic Development in Pakistan: An Empirical Analysis" Actual Problems of Economics Iss. 06 (2012)
Available at: http://works.bepress.com/chani/13/