A reevaluation of human capital accumulation and economic growth in OECD

Over the last three decades, the renewed interest in key drivers of economic growth in OECD countries has been the central discourse. The argument is whether physical or human capital matters for the economic growth in these countries. This study contributes to the ongoing debate by exploring the connection between human capital accumulation and economic growth between 1986 and 2018 for a panel of 24 OECD countries. The empirical evidence is based on the fixed effect and two-stage lease squares (2SLS). The result indicates that growth does not converge between countries. Further evidence shows that human capital, the savings rate, and the openness of trade play a vital role in OECD countries' economic growth. On the contrary, the findings show that life expectancy and inflation have adverse effects on growth. Thus, the study recommends the urgent need for intervention programs tailored toward improving research and development combined with investment in the well-being of the people and the effective utilization of human capital to promote growth while mitigating inflationary pressure.

Automated summary

The renewed interest in key drivers of economic growth in OECD countries over the last three decades has focused on the debate between physical and human capital. The study finds that human capital, savings rate, and trade openness play a vital role in economic growth in these countries, while life expectancy and inflation have adverse effects. The study recommends intervention programs tailored towards improving research and development, investing in people's well-being, and effectively utilizing human capital to promote growth and mitigate inflationary pressure.