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Greening the Workforce: The Power of Investing in Human Capital

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  • Aqib, Muhammad
  • Zaman, Khalid

Abstract

Experts are interested in creating human capital's role in boosting economic growth. Some research has been done on using human capital to help lessen carbon emissions in developing countries, but more needs to be done. So, the study looked at how developing human capital can make a country more prosperous by making the environment more sustainable through labour-added technology. The study analyzed data from Pakistan from the years 1975 to 2020 and employed robust least squares regression, Granger causality, and innovation accounting matrix methods to estimate parameters. According to the robust least squares regression results, lowering carbon emissions and increasing human capital may be achieved by investing more in environmentally friendly research and development. However, a green development strategy will never materialize since the federal government needs to invest more money in education, healthcare, and improvements to the employment market. The Granger causality analysis confirmed that continued economic growth Granger causes carbon emissions on the one hand while causing increasing life expectancy and net enrolment rates on the other hand. R&D spending and labour-augmented technology Granger cause an increase in life expectancy by fostering the development of cleaner production methods, which in turn helps improve the long-term viability of healthcare in a nation. According to the innovation accounting matrix results, life expectancy and the net enrolment rate will be the essential human capital factors affecting carbon emissions over the next ten years. In addition to human capital, changes in the labour market, spending on research and development, and technology that helps people do their jobs also affect the green development agenda. Pakistan should spend more of its budget on human development through technical knowledge and research and development. This would help the country switch from fossil fuels to clean, green technologies and hybrid-energy efficient methods to reduce carbon emissions.

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  • Aqib, Muhammad & Zaman, Khalid, 2023. "Greening the Workforce: The Power of Investing in Human Capital," MPRA Paper 116263, University Library of Munich, Germany, revised 05 Feb 2023.
    • Handle: RePEc:pra:mprapa:116263
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    Keywords

    Human development; Carbon emissions; Labor augmented technology; R&D expenditures; Pakistan.;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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