Improving economy by education and human capital: the impact of science, technology, research and development

Altun Taber, Ebru
This thesis is based on cross-sectional data analyses by using OLS methods to examine differences in countries’ per capita GDPs and specifically the effects of human capital, science, technology, research and development on these differences. The Human Capital Index (HCI) and PISA science scores make two different groups including 120 countries and 66 countries respectively. Countries ranked in terms of Human Capital Index are sub-divided into two parts according to their income class, which are high income & upper middle income countries and low income & lower middle income countries. Education is one of the most important differences among different economies; and its impact is reflected in human capital. Human capital is growing in importance in terms of economic growth. In the past, the school enrollment ratio was used as a proxy for human capital, but was inadequate in representing human capital resources. Later on, some international tests, such as PISA, started to replace school enrolment ratios. On the other hand, some researchers suggest that taking into account other controlling variables changes the effect of education on economic growth. Firstly, HCI and PISA score are used in the models and later on, to show whether education is significant to explain income differences, other controlling variables like R&D expenditure and number of scientific and technical journal articles are included. The results indicate that after adding control variables, the strong relationship between cross country income differences and HCI or PISA scores disappears or becomes weaker.


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Citation Formats
E. Altun Taber, “Improving economy by education and human capital: the impact of science, technology, research and development,” M.S. - Master of Science, Middle East Technical University, 2019.