An Analysis Of The Impact Of Human Capital On Global Economic Growth And Convergence

Since the beginning of the 21 st century,the world economy,especially the emerging economies,has developed more rapidly,the economic trade exchanges between regions have become closer and the role of science and technology in economic development has become more important,therefore large multinational companies have gradually become the main stream of the economic globalization.At the same time,along with the wave of economic globalization,a series of frequent investment activities such as foreign direct investment have made capital liquidity particularly important in ensuring regional economic integration and promoting economic globalization.Under these conditions,the channels through which human capital affects economic growth will inevitably be affected by the level of technology and capital liquidity,so will the explanation of the role of human capital in the neoclassical economic growth model and the prediction of economic growth convergence also change? This series of questions need to be further verified.In this thesis,a human capital augmented Solow model is used to do an empirical study on the panel data of world macroeconomic growth indicators from 1996 to 2019.The research structure is as follows: firstly,sorting out the contribution and convergence of physical capital,human capital,and labor to economic growth at home and abroad,and making corresponding literature reviews;secondly,analyzing the current status of world economic growth from 1996 to 2019,and summarizing the trends and characteristics of the world economic growth;thirdly,briefly introducing and deriving the theoretical model for empirical analysis;fourth,adding infant mortality as a variable of human capital of health to the augmented Solow model,and analyzing the interaction effect between physical capital and human capital on economic growth and convergence,then conducting empirical test with the panel data of world economic growth indicators from 1996 to 2019,and comparing with the views of Mankiw(1992);fifth,drawing the final conclusions of this thesis.Through empirical analysis,three conclusions are drawn: first of all,the health level of human capital plays an important role in the development of the economy.This thesis uses infant mortality to measure the initial health endowment of human capital and finds that the higher the infant mortality rate in a country,the lower the per capita output.Therefore,there is an obvious positive correlation between economic growth and the health level of human capital.Increasing investment in human capital such as better medical security and better educational resources is an effective way for a country to improve its economic development.Second,compared with the period from 1960 to1985,during the period 1996-2019,the proportion of the return on human capital in the national income gradually increased with the proportion of the return on material capital decreased.The main reason lies in technological progress and economic globalization.Capitalists or investors no longer only prioritize the value of the stock of material capital,but pay more attention to the efficiency of material capital,such as the level of science and technology.Therefore,the role of material capital in economic growth has been gradually diluted with the consequence of the decreasing rate of return on material capital,while the improvement of education and health has cultivated a large number of high-level labors,which make the impact of human capital on economic growth way stronger than before.Third,a more obvious and accelerating convergence of economic growth.Since the 1990 s,frequent global free trade and foreign investment have been promoting the standardization of the economic systems and policies of international organizations and various countries;the rise of internet technology and the externality of knowledge also have made the diffusion of technology coexist internationally and regionally,but international technology diffusion is still the mainstream.Worldwide network and improvement of the level of science and technology have made the world economic growth featured with accelerating convergence.