The Role of Human Capital in Economic Growth

Abstract

This study presents stylized facts for economic growth for the second half of the 20th century, and evaluates the explanatory capacity of these facts by two of the main theoretical approaches that deal with the relation between human capital and growth: the Lucas (1988) model, and the Nelson-Phelps (1966) model. The results obtained indicate that the Lucas (1988) model satisfactorily explains the growth of rich countries, but does not explain the poverty traps in which poor countries found themselves during the period under study. Conversely, the simulations conducted according to the Nelson-Phelps approach (1966) adequately replicate the poverty traps, but the approach is unable to do so for rich country dynamics.