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

This study examines the long-run relationship and causality between human capital and economic growth for Turkey by using the autoregressive distributed lag (ARDL) approach and Toda and Yamamoto (1995) causality test. The dataset covers the 1971-2013 period. In order to measure the human capital different education levels of gross enrolment ratios (primary, secondary, and tertiary) were considered. The main finding of this paper indicates that apart from other education levels, an accumulation of high-educated (tertiary education) human capital fosters economic growth in Turkey. A long-run relationship and bidirectional causality are found between tertiary education and economic growth. In this context, 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.

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