(The) effect of investment of human capital on the economic development of Korea

Abstract

For some time, a major concern in growth literature has been to explain what accounts for the difference between the total measured growth of inputs and outputs. The difference was often referred to as "technical change" as a matter of definition. Recently, however, the quality of labor has been singled out as the major factor explaining the difference. This newly discovered factor was expanded on by the development of human capital concept. The objective of the study is to give an estimate of the effects of the investment of human capital on the economic development of Korea. The estimate is based on multivariate analysis of the relationship between the variation in some selected indices of investment in education and health among 106 cities and municipalities in 1986, and the variation in the increments in per capita income among the cities and municipalities from 1986 to 1990. The novel feature of this study is the inclusion of health as an indispensable component of human capital. Result also shows greater effect of health variables on development than that of education variables. This results will be a good suggestion to the policy makers to induce them to shed more attention to health investment.