Abstract
Background: This article evaluates the role of human capital in the promotion of technological progress, economic growth and development in Africa by focusing on the case of Kenya.Objectives: The overall objective of this article was to evaluate the effects of human capital on technological progress, economic growth and development in Kenya over the period between 1971 and 2014.Method: In this article, human capital was measured by human capital index defined as the ratio of current level of human capital in the national economy to the level of human capital 2 years ago. In particular, human capital in the broad sense was estimated by computing the ratio between 2 years of the hypotenuse of capital and labour vectors, and this measure outperformed all the other measures of human capital by yielding very good regression results by way of the generalised least squares technique.Results: Based on the econometric and statistical analyses, human capital in Kenya was found to have had a positive influence on economic growth in the long run. Human capital was also found to have had a positive influence on labour in the long run.Conclusion: Both human capital formation and technological progress should be given priority in the promotion of economic growth and development in Kenya rather than merely increasing the productivity of either capital or labour. Capital accumulation and labour generation should also be encouraged because increase in the two variables always under normal circumstances results in economic growth and development.
Highlights
BackgroundHuman capital is the stock of skills that the labour force possesses
After real disposable income was regressed on capital stock, the results showed that a 1% growth in capital could have caused disposable income to grow by 0.23% per annum ceteris paribus, as given by the linear regression Equation (17)
The coefficient value of 0.23 was used in the estimation of the labour stock series by using disposable income and capital stock series according to Equation (17)
Summary
BackgroundHuman capital is the stock of skills that the labour force possesses. It encompasses the idea that there are investments in people (e.g. education, training and health) and that these investments increase an individual’s productivity. Modern theories of economic growth emphasise human capital According to these theories, human capital can promote growth by stimulating technical progress, inventions and innovations. Several empirical studies have endeavoured to establish the relationship between human capital and economic growth. In many of those studies, human capital was found to enhance economic growth and development. In some few cases, human capital has failed to stimulate economic growth and development. The hypothesis that human capital plays a significant role in technological progress, economic growth and development has not been empirically validated (Oxley, Le & Gibson 2008). This article evaluates the role of human capital in the promotion of technological progress, economic growth and development in Africa by focusing on the case of Kenya
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