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Human Capital and Economic Growth: Pakistan, 1960-2003

Author

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  • Qaisar Abbas

    (Comsats Institute of Information Technology, Islamabad, Pakistan & Cardiff Business School, Cardiff University, UK.)

  • James Foreman-Peck

    (Cardiff Business School, Cardiff University.)

Abstract

This paper investigates the relationship between human capital and economic growth in Pakistan with aggregate time series data. Estimated with the Johansen (1991) approach, the fitted model indicates a critical role for human capital in boosting the economy’s capacity to absorb world technical progress. Much higher returns, including spillovers, to secondary schooling in Pakistan than in OECD economies is consistent with very substantial education under-investment in Pakistan. Similarly, extremely large returns to health spending compare very favorably with industrial investment. Human capital is estimated to have accounted for just under one-fifth of the increase in Pakistan’s GDP per head. Since the 1990s, the impact of deficient human capital policies is shown by the negative contribution to economic growth.

Suggested Citation

  • Qaisar Abbas & James Foreman-Peck, 2008. "Human Capital and Economic Growth: Pakistan, 1960-2003," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 13(1), pages 1-27, Jan-Jun.
    • Handle: RePEc:lje:journl:v:13:y:2008:i:1:p:1-27
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    More about this item

    Keywords

    Human Capital; Economic Growth; Cointegration; Pakistan;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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