IMPACT OF INVESTMENTS IN HUMAN CAPITAL DETERMINANTS ON ECONOMIC GROWTH: TIME SERIES ANALYSIS BASED ON SRI LANKA

Abstract

The Impact of Human Capital on the Economic growth has always been a matter of discussion in the field of Economics. According to OECD “Human Capital is defined as the knowledge, skills, competencies and other attributes embodied in individuals acquired during their life and used to produce goods, services or ideas in market circumstances”. The aggregate Human Capital of an Economy determined by national health and Education standards. Long term Economic growth increasingly on improvements in Human capital, better educated, healthy, innovative and creative workforce can help increase labour productivity in Economic growth. There for can be no significant economic growth in any country without adequate Human capital developed. In Sri Lankan context there is a controvational discuss on role of human capital in Economic growth process. Sri Lanka was achieved a higher level of education and health indicators relative to the other south Asian countries (HDI Reports 2014 – 2015). But there is a problematic situation regarding contribution of education and health sectors in economic growth of a Sri Lanka relative to the investments on both sectors. So far results of researches which was conducted on impact of human capital in economic growth is directly depend on variables and indicators they used in their researches. There for necessary to examine impact of the Human Capital on Economic growth of Sri Lanka consisting broad variables than before. This study examine the impact of Human capital determinants on economic growth in Sri Lanka incorporating both Health and Education which has not been considered in previous studies.