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Economic freedom and human capital investment

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  • FELDMANN, HORST

Abstract

Using data from 1972 to 2011 on 109 countries, this paper empirically studies the impact of economic freedom on human capital investment. Enrollment in secondary education is used as a proxy for such investments. Controlling for a large number of other determinants of education, it finds that, over the sample period, economic freedom had a substantial positive effect. This is probably because more economic freedom increases the return on investing in human capital, enables people to keep a larger share of the return, and, by facilitating the operation of credit markets, makes it easier for them to undertake such investments in the first place.

Suggested Citation

  • Feldmann, Horst, 2017. "Economic freedom and human capital investment," Journal of Institutional Economics, Cambridge University Press, vol. 13(2), pages 421-445, June.
    • Handle: RePEc:cup:jinsec:v:13:y:2017:i:02:p:421-445_00
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    Cited by:

    1. P. Eko Prasetyo & N. Rahayu Kistanti, 2020. "Human capital, institutional economics and entrepreneurship as a driver for quality & sustainable economic growth," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(4), pages 2575-2589, June.
    2. Graafland, Johan, 2023. "Economic freedom and life satisfaction: A moderated mediation model with individual autonomy and national culture," European Journal of Political Economy, Elsevier, vol. 79(C).
    3. Christopher J. Boudreaux & Daniel L. Bennett & David S. Lucas & Boris N. Nikolaev, 2023. "Taking mental models seriously: institutions, entrepreneurship, and the mediating role of socio-cognitive traits," Small Business Economics, Springer, vol. 61(2), pages 465-493, August.
    4. Johan Graafland & Harmen Verbruggen, 2022. "Free-Market, Perfect Market and Welfare State Perspectives on “Good” Markets: an Empirical Test," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(2), pages 1113-1136, April.
    5. Ouedraogo, Idrissa & Ngoa Tabi, Henri & Atangana Ondoa, Henri & Jiya, Alex Nester, 2022. "Institutional quality and human capital development in Africa," Economic Systems, Elsevier, vol. 46(1).
    6. Olalekan Charles Okunlola & Anthony E. Akinlo, 2021. "Does economic freedom enhance quality of life in Africa?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 68(3), pages 357-387, September.
    7. Sean Alley & Mark Melichar, 2021. "Examining the Impact of Economics Education on Young Americans’ Attitudes about the Economy and Economic Institutions," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 36(Winter 20), pages 21-44.
    8. Ibrahima Dia & Henri Atangana Ondoa & Idrissa Ouedraogo, 2024. "Does economic freedom foster education in Sub‐Saharan Africa?," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 939-972, March.
    9. Mehmet Pinar & Thanasis Stengos & Nikolas Topaloglou, 2022. "Stochastic dominance spanning and augmenting the human development index with institutional quality," Annals of Operations Research, Springer, vol. 315(1), pages 341-369, August.
    10. Olalekan C. Okunlola & Olumide A. Ayetigbo & Sam O. Ajiye, 2022. "Does a free market system reduce conflict in Africa?," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 24(1), pages 147-170, June.
    11. Jeremy Horpedahl & Jeremy Jackson & David Mitchell, 2019. "Is Economic Freedom the Hidden Path to Social Justice?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 34(Winter 20), pages 55-74.
    12. Justin T. Callais & Vincent Geloso, 2023. "Intergenerational income mobility and economic freedom," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 732-753, January.
    13. Horst Feldmann, 2021. "Economic Freedom and People’s Regard for Education," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(1), pages 235-256, February.
    14. Johan Graafland, 2020. "When Does Economic Freedom Promote Well Being? On the Moderating Role of Long-Term Orientation," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(1), pages 127-153, May.
    15. Graafland, Johan & de Jong, Eelke, 2022. "The moderating role of culture on the benefits of economic freedom: Cross-country analysis," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 280-292.
    16. Atangana Ondoa Henri & Seabrook Arthur Mveng, 2024. "Economic Freedom and Productivity in Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 3039-3058, March.
    17. Ho Thuy Ai & Ping, Lin, 2018. "Impacts of fiscal policy on economic growth: Another look from institutional perspective," Economics Discussion Papers 2018-45, Kiel Institute for the World Economy (IfW Kiel).
    18. Dean, James & Geloso, Vincent, 2024. "Poverty spells and economic freedom: Canadian evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 282-296.
    19. Olalekan C. Okunlola & Olumide A. Ayetigbo, 2022. "Economic Freedom and Human Development in ECOWAS: Does Political-Institutional Strength Play a Role?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 1751-1785, September.

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