Abstract
Education has a close relation to the quality of labor. With a good level of education, labor productivity will certainly increase. In addition to reducing poverty, productivity will increase economic growth. But in Jawa Tengah Province the correlation of education with economic growth shows contradictions. In Jawa Tengah, economic growth has increased quite well but the average years of schooling is elementary school graduates. By using Mincer Wage Equation, this paper Is trying to calculate social return on education within macroeconomic growth regression methods. This paper aims to capture relationship between education attainment and economic growth in macroeconomic ways.
Highlights
As the main driving force of the economy, labor has a very important role
With a fundamental idea that individuals will try to get maximum wealth throughout their lives. This assumption in the Ben-Porath (1967) as in Mincer (1974) model is that the labor supply is constant all the time, human capital stock depreciate over time, workers are able to allocate their time and activities to work and attend school or attend training, education and training are able to produce stock of human capital that will increase marginal productivity of labor but at some point increased in stock of human capital will decrease labor productivity
This study discusses the Mincer method, the equation based on micro methods with economic growth
Summary
Paradigm of labor as production factor has shift over. We treat labor as non-physical investment instead of labor as factor input and it’s called human capital. Human capital or investment in human resources is a few funds or sacrifices incurred and opportunities to earn income during the investment process. Income during the investment process is expected to obtain a higher level of income to be able to achieve a higher level of consumption (Simanjuntak, 1985). The higher the quality of human resources, the higher the efficiency and productivity. Human capital investment is believed to be the basis for increasing production factor productivity. Human capital is an embodied factor within each worker. If the physical input factor can occur diminishing returns, but science wouldn’t
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