Human Capital and Economic Growth: Bounds and Causality Analysis for Turkey

Abstract

Human Capital and Economic Growth: Bounds and Causality Analysis for Turkey

Abstract

This study examines the long-run relationship and causality between human capital and economic growth for Turkey using the autoregressive distributed lag ARDL approach to cointegration and another version of the Granger causality test Toda and Yamamoto 1995 over the period 1971-2013. Different education levels of gross enrolment ratios primary, secondary and tertiary are used to measure and to consider the human capital. The main findings of this paper indicates that apart from other education levels, high educated tertiary education human capital accumulation fosters economic growth. A long-run relationship and a bidirectional causality is found from tertiary education to economic growth. Thus this study supports the human capital-based endogenous growth theory for Turkey. A stable long run economic growth can be achieved through high-skilled human capital.

Keywords

• Bounds Testing Procedure, Economic Growth, Granger Causality, Human Capital, Turkey

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