The Long-Term Impact of Human Capital Investment on GDP: A Panel Cointegrated Regression Analysis

摘要

This study aims to determine the long-run impact of physical and human capital on GDP by using the panel data set of 13 developed and 11 developing countries over the period 1970-2010. Gross fixed capital formation is used as physical capital indicator while education expenditures and life expectancy at birth are used as human capital indicators. Panel DOLS and FMOLS panel cointegrated regression models are exploited to detect the magnitude and sign of the cointegration relationship and compare the effect of these physical and human capital variables according to these two different country groups. As a consequence of panels DOLS and FMOLS models, the impact of physical capital and education expenditures on GDP in the developed countries is determined as higher than the impact in the developing countries. On the other hand, the impact of life expectancy at birth on GDP is determined as higher in the developing countries.