Title: Contribution of human capital to economic growth from the education policy point of view – empirical analysis for EU economies

Authors: Matjaz Novak, Primoz Dolenc, Igor Stubelj, Mateja Jerman

Addresses: Department of Economics, Faculty of Management Koper, University of Primorska, Canakarjeva 5, 6000 Koper, Slovenia. ' Department of Business Sciences, Faculty of Management Koper, University of Primorska, Canakarjeva 5, 6000 Koper, Slovenia. ' Department of Business Sciences, Faculty of Management Koper, University of Primorska, Canakarjeva 5, 6000 Koper, Slovenia. ' Department of Business Sciences, Faculty of Management Koper, University of Primorska, Canakarjeva 5, 6000 Koper, Slovenia

Abstract: Our research presented in this article is based on the macroeconomics background and addresses the following two questions in case of 27 EU-member states: 1) |To what extent does education contribute to human capital?|; 2) |What is the contribution of human capital to economic growth?| The main part of the article is empirical analysis that consists from: 1) the empirical estimates on the amount of human capital for EU27; 2) the empirical estimation about the contribution of human capital to economic growth for EU27; 3) the empirical analysis on relationship between the contribution of human capital to economic growth and the amount of public expenditure on education. We find the 5.14% of GDP as the amount of public spending on education that maximises the contribution of human capital to economic growth.

Keywords: human capital; economic growth; education; public spending: EU; European Union; macroeconomics; public expenditure; GDP; knowledge-based development; education spending; education expenditure.

DOI: 10.1504/IJKBD.2011.040625

International Journal of Knowledge-Based Development, 2011 Vol.2 No.1, pp.49 - 65

Published online: 07 Jun 2011 *

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