Empirical evidence show that increase in human capital causes economic growth is rather nebulous . Explain
The given statement refers to the vagueness of measurement of economic growth caused due to human capital formation due to the following reasons:
- Education measured in terms of years of schooling, teacher-pupil ratio and enrolment rates may not reflect the quality of education and exactly how much will it benefit to the economy directly
- Health services measured in monetary terms, life expectancy and mortality rates may not reflect the true health status of the people in a country.
- The human capital growth in developing countries has been faster but the growth of per capita real income has not been that fast.