The Relation between Human Capital and Economic Growth in MENA Countries

Abstract

The aim of this study is to analyze the relation between human capital and economic growth for the years between 1990 and 2011 in 15 MENA (Middle East and North Africa) countries. Knowles and Owen’s (1995) model which is based on Mankiw et al. (1992)’s Augmented Solow Model in principle is used as the economic model in the study. However, the statistical analysis is panel-data for the countries. Human capital is represented by both health and education at the same time. The findings show that public expenditure on human capital does not have any significant effect on economic growth neither in terms of health nor education. But this does not change the fact that when health and education quality are improved, the GDP per capita would increase, thus growth can be much more effective.