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Investment in Human Capital and Economic Growth in Singapore

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  • Biswajit Maitra

Abstract

Since independence in 1965, the economy of Singapore has transited from a low-income economy to a high-income developed economy. Over the period, the educational policy of the country has been framed consistent with the national economic policy and human capital formation. The article examines whether investment in human capital and employment contributed to economic growth in Singapore over the last three decades. Johansen cointegration tests find a long-run relation among economic growth, human capital investment and employed labour force. The article also enquires the dynamics of economic growth maintained with human capital investment and labor force employment involving a battery of econometric techniques. It is found that both human capital investment and employment contributes to rise in economic growth. Human capital investment at the initial stage has growth-retarding effect and eventually accelerates sustained growth with a gestation lag of 4 years. If the maintained relation persisted over time, study exhibits that human capital innovation would lead to perpetual rise in economic growth. Labour force employment innovation, in this regard, may lead to temporary rise in economic growth.

Suggested Citation

  • Biswajit Maitra, 2016. "Investment in Human Capital and Economic Growth in Singapore," Global Business Review, International Management Institute, vol. 17(2), pages 425-437, April.
    • Handle: RePEc:sae:globus:v:17:y:2016:i:2:p:425-437
    DOI: 10.1177/0972150915619819
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    4. Isreal, Akingba Idowu Opeoluwa & Kaliappan, Shivee & Hamzah, Hanny Zurina, 2019. "Impact of Health Capital on Total Factor Productivity in Singapore," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(2), pages 83-98.
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    8. Sakib, S M Nazmuz, 2021. "Factors which are Affecting Human Capital in Singapore," Thesis Commons 38txr, Center for Open Science.
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