Can tourism development induce deterioration of human capital?

Abstract

Modern economic theory considers high-quality human capital the most valuable resource for robust economic growth. Since tourism in general does not require graduate employees, it could be argued that the development of tourism leads to the re-direction and even the deterioration of human capital. This hypothesis is tested in the case of Croatia, a small tourism-oriented Mediterranean country which has recently experienced exceptional growth in the tourism sector. The methodology of quasi-experimental research is applied in order to answer the question whether there is a significant difference in the number of students enrolled in professional or university studies between two groups of Croatian towns and municipalities, whereby one group having recently experienced a five-year period of intense tourism development.