Research Scholar, Faculty of Commerce, Department of Business Economics, The M.S. University of Baroda, Vadodara, Gujarat, India
Online published on 8 January, 2014.
The work presented here examines the causal relationships that exist between Human capital formation and Economic growth. The applied part of the analysis is performed using time series data for India within the 1990–2011 time-frames. The data used in this study were collected from the period of 1990 to 2011. The two variable regression analysis techniques is used to identify the significance of different variables. The model for the study was estimated using the ordinary least square (OLS) technique. For checking the long run equilibrium and causal relationship between economic growth and human capital formation unit root, Johansen cointegration and Pair-wise Granger Causality test is utilized using the time series data. The results of the co-integration show that the variables are co-integrated. They have long run stable equilibrium relationship. The results of the causality test show that there is bidirectional causal relationship between economic development and human capital formation.
Human capital formation, Economic growth, two variables regression, ordinary least square, Pair-wise Granger Causality, unit root
