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

Year 2017, Volume: 5 Issue: 1, 21 - 32, 01.01.2017

Hacer Simay Orhan Karaalp

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

References

• Akkoyunlu, Sule and Borris Siliverstovs (2014), “Does The Law of One Price Hold in A High- Inflation Environment? A Tale of Two Cities İn Turkey”, Applied Economics, Volume:46, Issue:26, p. 3236-3245.
• Altıntaş, Halil, and Hakan Çetintaş, (2010), “Türkiye’de Ekonomik Büyüme, Beşeri Sermaye ve Ihracat Arasındaki Ilişkilerin Ekonometrik Analizi: 1970-2005”. Erciyes Üniversitesi İ.İ.B.F. Dergisi, Sayı:36, 33-56.
• Asteriou, Dimitrios and George Mayron Agiomirgianakis (2001), “Human Capital and Economic Growth: Time Series Evidence From Greece”, Journal of Policy Modeling, Volume.23, Issue:5, p.481-489.
• Bal, Harun, Neşe Algan, Müge Manga and Ediz Kandır (2014), “Beşeri Sermaye ve Ekonomik Büyüme İlişkisi: BRICS Ülkeleri ve Türkiye Örneği”, Uluslararası Avrasya Ekonomileri Konferansı, 1-3 Temmuz 2014, Üsküp/Makedonya.
• Barro, Robert J. (1991), “Economic Growth in a Cross-section of Countries”, Quarterly Journal of Economics, Volume:106, Issue:2, p. 407–443.
• Barro, Robert J. (1997), Determinants of Economic Growth: A Cross-Country Empirical Study, The MIT Press, Cambridge, MA.
• Barro, Robert J. and Jong-Wha Lee (1993), “International Comparisons of Educational Attainment”, Journal of Monetary Economics, Volume 32, Issue 3, p. 363–394
• Barro, Robert J. and Jong-Wha Lee (2013), “A New Data Set of Educational Attainment in the World, 1950–2010”, Journal of Development Economics, Volume 104, p. 184–198
• Becker, Gary (1964), Human Capital, Princeton University Press, Princeton, N.J.
• Benhabib, Jess and Mark M. Spiegel (1994), “The Role of Human Capital in Economic Development: Evidence from Aggregate Cross-Country Data”, Journal of Monetary Economics, Volume:34, Issue:2, p.143-173.
• Boztosun Derviş, Semra Aksoylu and Zübeyde Şentürk Ulucak (2016), “The Role of Human Capital in Economic Growth”, Economics World, Volume: 4, No: 3, p.101-110
• Gemmell, Norman (1996), “Evaluating the Impacts of Human Capital Sstocks and Accumulation on Economic Growth: Some New Evidence”, Oxford Bulletin of Economics and Statistics, Volume:58, Issue:1, p. 9–28.
• Genç, Murat Can, Mustafa Kemal Değer ve Metin Berber (2010), “Beşeri Sermaye, Ihracat ve Ekonomik Büyüme: Türkiye Ekonomisi Üzerine Nedensellik Analizi”, The Journal of Knowledge Economy & Knowledge Management, Volume: 5, Issue:1, p.29-41.
• Chuang, Yih-chyi (2000), “Human Capital, Exports, and Economic Growth: A Causality Analysis for Taiwan, 1952–1995”, Review of International Economics, Volume:8, Issue:4, p.712–720.
• Clark, Judith A. and Sadaf Mirza (2006), “A Comparison of Some Common Methods of Detecting Ganger Noncausality”, Journal of Statistical Computation and Simulation, Volume:76, No:3, p. 207–231.
• Demir, Gülten and Ayşe Demir Yılmaz (2016), “Türkiye ve Brics Ülkelerinde Beşeri Sermaye ve Ekonomik Büyüme İlişkisi: Panel Granger Nedensellik Analizi”, Marmara Sosyal Araştırmalar Dergisi, Sayı:1-21.
• Dickey, David. A. and Wayne A. Fuller (1979), “Distribution of the Estimators for Autoregressive Time Series with A Unit Root”, Journal of the American Statistical Association, Volume:74, Issue:366, p.427–431.
• Engle, Robert F. and Clive W.J. Granger (1987), “Co-integration and Error Correction: Representation, Estimation and Testing”, Econometrica, Volume:55, Issue:2, p. 251–276.
• Granger, Clive W.J. (1969), “Investigating Causal Relations by Econometric Models and Cross Spectral Models”, Econometrica, Volume:37, Issue:3, p. 424–438.
• Grossman, Gene M. and Elhanan Helpman, (1991), Innovation and Growth in the Global Economy, MIT Press, Cambridge MA.
• Jung, Hong-Sang and Erik Thorbecke (2003), “The Impact of Public Education Expenditure on Human Capital, Growth, and Poverty in Tanzania and Zambia: A General Equilibrium Approach”, Journal of Policy Modeling, Volume 25, Issue 8, p. 701–725
• Kar, Muhsin and Hüseyin Ağır (2006), Türkiye’de Beşeri Sermaye ve Ekonomik Büyüme İlişkisi: Eşbütünleşme Yaklaşımı ile Nedensellik Testi, 1926-1994. Selçuk Üniversitesi, İ.İ.B.F. Sosyal ve Ekonomik Araştırmalar Dergisi, Sayı:6, No:11, s.51-68.
• Khan, Shahrukh R., W. Douglass Shaw and Fazal Hussain (1991), “Causality between literacy and labor productivity in Pakistan”, Economics of Education Review, Volume: 10, Issue: 3, p. 245-251.
• Narayan, Paresh Kumar (2005), “The saving and Investment Nexus for China: Evidence from Cointegration Tests”, Applied Economics, Volume: 37, Issue: 17, p. 1979–90.
• Lee, Jong-Wha (2005), “Human Capital and Productivity for Korea’s Sustained Economic Growth, Journal of Asian Economics, No:1 6, p.663–687.
• Perron, Pierre (1989), The Great Crash, The Oil Price Shock, and The Unit Root Hypothesis, Econometrica, Volume: 57, Issue: 6, p.1361–401.
• Pesaran, M. Hashem. Yongcheol Shin and Richard J. Smith (2001), Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics, No:16, p. 289–326.
• Pitarakis, Jean-Yves and George Tridimas G. (2003),“Joint Dynamics of Legal and Economic Integration in the European Union”, European Journal of Law and Economics, Volume:16, Issue:3, p. 357-368.
• Romer, Paul M. (1990), “Human Capital and Growth: Theory and Evidence,” Carnegie–Rochester Conference Series on Public Policy, Volume:32, Issue:1, p.251–85.
• Schultz, Theodore W. (1961), “Investment in Human Capital”, The American Economic Review, Volume: 51, No:1, p.1-17.
• Sims, Christopher. A., James H. Stock, and Mark W. Watson, (1990), “Interference in Linear Time Series Models with Some Unit Roots”, Econometrica, Volume:58, No:1, p. 113–144.
• Şimşek, Muammer and Cem Kadılar (2010), “Türkiye’de beşeri sermaye, ihracat ve ekonomik büyüme arasındaki ilişkinin nedensellik Analizi”, Cumhuriyet Üniversitesi İ.İ.B.F. Dergisi, Sayı:11, No:1, s. 115-140.
• Solow, Robert M. (1956), “A Contribution to the Theory of Economic Growth”, The Quarterly Journal of Economics, Volume. 70, No. 1, p. 65-94
• Stokey, Nancy L., (1991), “Human Capital, Product Quality, and Growth,” Quarterly Journal of Economics, Volume: 105, Issue:2, p. 587–616.
• Taban, Sami and Muhsin Kar (2006), “Beşeri Sermaye ve Ekonomik Büyüme: Nedensellik Analizi 1969-2001”, Anadolu Üniversitesi Sosyal Bilimler Dergisi, Sayı:6, No:1, s.159-182
• Toda, Hiro Y. and Taku Yamamoto (1995), “Statistical Inference in Vector Autoregressions with Possibly Integrated Process”, Journal of Econometrics, Volume:66, Issue:1-2, p. 225–250.
• Tsen Wong Hock (2006), “Granger Causality Tests among Openness to International Trade, Human Capital Accumulation and Economic Growth in China: 1952–1999”, International Economic Journal, Volume: 20, No:3, p. 285-302
• TURKSTAT (2016), Labor force Statistics, http://www.tuik.gov.tr/PreTablo.do?alt_id=1007, 10.09.2016.
• Varsak, Serkan and İbrahim Bakırtaş (2009), “Ekonomik Büyüme Üzerinde Beseri Sermayenin Etkisi: Türkiye Örneği”, Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, Sayı:25, p.49-60.
• Wolde-Rufael, Yemane (2007), “Another look at the Relationship between Telecommunications Investment and Economic Activity in the United States”, International Economic Journal, Volume:21, Issue:2, p.199-205
• World Bank (2016), World Development Indicators, http://data.worldbank.org/, 08.10.2016.
• Young, Alwyn (1995), “The Tyranny of numbers: Confronting the statistical realities of the East Asian growth experience”, Quarterly Journal of Economics, Volume:110, No:3, p.641–680.