International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Role & Status of Educated Human Resources (Human Capital) on Economic Growth of Iran
Keramat Ghalandarzehi, Mehdie Safdarie

Human capital is the prerequisite of development, because the speed of growth and rate of development depend on the quality and quantity of efficient workforce. In fact, human capital provides potentials for change and improvement, optimizes the use of physical and tangible capital, increases the efficiency of production and finally accelerates the rate of economic growth. In this study, the importance of human capital in economic growth is illustrated through endogenous economic growth models, using Romer`s endogenous economic growth model. We will estimate the model for Iran`s economic growth and discuss and test the effect of human capital, physical capital and export of manufactured goods on national gross output. The resultant findings suggest that a positive correlation between human capital and economic growth emerges when the economic structure of the country has the capacity of attracting skillful and expert workforce in different fields of activity. Otherwise, given the growth in educational indices among the active population, and lack of growth in production-based economic indices the gap between educated expert workforce and employment, with respect to absorbing job opportunities, will appear as unemployment of educated and expert workforce.

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