Human Capital and Economic Growth of Pakistan

Abstract

Human capital consists of set of resources which define individuals' overall ability and includes skills, education, training, health and other talents. These abilities collectively shape up the potential of citizens of a country and help in charting the course of economic growth and development of that country. The ranking of Pakistan in terms of human capital index is reported to have dropped to 113 from 109 out of 124 countries (Human Capital Report 2014-2015) and thus requires a lot of attention. The main aim of this paper is to investigate the relationship between human capital and economic growth in Pakistan. Explaining human capital by the proxies of primary enrolments rate, birth rate, and infant mortality rate, this paper confirms the role of human capital in promoting development in Pakistan. Physical capital was used as a fixed capital and one of the factors of production. Result indicates that the two main sectors which need considerable amount of attention are education and health. This objective can be achieved by allocating high percentage of GDP to these sectors