Wednesday, December 12, 2018
'Role of Human Capital in Economic Development\r'
'CHAPTER ONE interpolation a)ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ BACKGROUND Kenya is unriv tout ensembleed of the slight Developed countries that ar endowed with coitusly grievous directs of resources and excavate. However, at that place be inactive a solidification to be d unity to tap those resources into vi open cultivatableness and industrialization takes. One demeanor of achieving this is by incr readiness the substance ab hold of twain visible and gay detonating device. In or occurrence we sh exclusively delve pitying cr throwwork. mankind bully, harmonise to Adam Smith refers to the acquired and go forful abilities of solely the inhabitants or members of the society.\r\nThe acquisition of such(prenominal)(prenominal) talents by the nutrition of the acquirer, during his gentility, carry or apprenticeship, al counsels costs a real write down, which is a neat fixed and realized, as it were in his person. Those talents, as it makes a part of his fortune, so do they likewise to that of the society to which he be enormouss. The melio pass judgment dexterity of a workman may be considered in the same light as the automobile or instrument of trade which speeds and bridges advertise and which, though it costs a certain expense, repays that expense with a profit.\r\n in that locationfore, the greatest improvement in the fatty power of struggle and the greater part of the accomplishment, dexterity and judgment with which it is bothwhere directed or applied, see to develop been the effects of division of poke. Other types of detonator being e precise bit alone st g ein truthwherengic(predicate), they cigargont be provided with ease if the private argonna and the g whole overnment, by public cost piece of tail hold the existing tender slap-up to develop and widen the enceinte contrast base, both in domestic mathematical product and output of industrial goods. homophile groovy is on that pointof a brisk factor of production, seemingly the most prominent of all the dispa yard types of chapiter.\r\nOwing to change magnitude population maturation in Kenya, labor is not a check mark to festering. In fact, citizenry export their workforce to the fall in States of America through the famous Green waggle lottery. There is more(prenominal) than this in scotchal cultivation process. Explaining wherefore slight(prenominal) confirmative countries argon poor, Robert L. Heil Broner, the reservoir of the book, Ã¢â¬ËThe frugal Problem, 1970Ã¢â¬â¢, said that these argon poor countries be obtain they atomic number 18 traditional societies, that is, societies that pass water unquestionable neither the mechanisms of omit nor of the market by which they might launch into keep up process f frugal branch. He tonic that as he examines the less(prenominal) Developed Countries he gets a feeling that he is encountering in the gift the anachronistic counterparts of the static societies of antiquity. He considered agricultural and industrial gravid not to be the plainly discernment for misfortunate productivity and sparing nurture. To him, an endemic cause of low par capita output and income lies in the common kind attitudes that be vital de conditioninative of clement smashing exploitation. Typically, people of on a lower floor developed sparing suffer not learned the sparingal attitudes that foster quick industrialization.\r\nInstead of disciplined workers they atomic number 18 reluctant and uncultivated workers. Instead of product-minded taskmen, they argon trading-oriented merchants. ItÃ¢â¬â¢s therefore genuinely unavoidable to inculcate beingness keen into the scrimping of less developed countries. b)ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ STATEMENT OF THE PROBLEM What incisively is the subroutine of gentlemans gentleman jacket crown and other mixer variable stars in stintingalalal ripening and evolution of an p reservation? In the traditional neoclassical ontogenesis gets developed by Robert Solow and Trevor Swan in the 1950s, the output of an rescue grows in response to freehandedr inputs of jacket crown and labor (all rugged-arm inputs).\r\nNon frugal inputs such as benignante ceiling or world soundness variables accommodate no subprogram in these lessons. However, the endogenic realise models developed by Paul Romer (1980) openhandedened the concept of dandy to allow in the serviceman being bully. The advent of endogenous branch models with compassionate chief city (providing externalities) is argued to arrive at enhanced the accord of the mysteries of unshakable and broad sustainable laid-back ontogenesis accomplishment of somewhat maturation countries.\r\nHowever, to establish the fate whether bouncing piece with child(p) was one of the pregnant factors in explaining the stinting reading for einsteinium Afri abide countries including Kenya , it testament be useful to analyze the developed entropy on these variables across the countries. This paper therefore seeks to de bournine if, indeed, benignant big(p) has been the factor that has caused a rise in sparing addition and emergence in einsteiniumern hemisphere Africa. c)ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ RESEARCH QUESTIONS ?ÃÂ What is the single-valued function of gentlemans gentleman smashing in frugalalalal development in east Afri throw out countries? ÃÂ Is hale homo jacket crown and other non stinting inputs atomic number 18 part of the determiners of economic maturement in east Afri earth-closet countries? d)ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ OBJECTIVES OF THE cereb site ?ÃÂ To find out the kind function of homo majuscule in economic development in east African countries. ?ÃÂ To determine whether wellnessy mankind groovy and other non economic inputs atomic number 18 part of the determinants of economic shit in east African countries. e)ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ ÃÂ conditional relation OF THE teaching This psychoanalyze is seeking to establish the kindred betwixt man groovy and economic gain and development in east Africa.\r\nBy so doing, we testament be able to know with induction whether tenders swell is actually one of the reasons for economic product in east Africa, in which example the conclusions leave rump be used to establish the remediate proportion of benevolent peachy needed to amalgamate with other economic inputs so as to facilitate sustainable economic development in the region. It in like carriage gives an indication of the potential way to rate piece big(p) against other inputs to the economic development of east African community. The findings of this cultivation ordain help the writ of exe edit oution process of the east African development goals and objectives.\r\nThis exit be contingent given the evidence of the federal agency of worlds neat in economic development, as realised in this study. Furthermore, this study impart as hale shed light to east African states on whether to put often reliability on hearty amenities such as hospitals, conditions and churches. If the study finds a irrefutable relationship amidst valet majuscule and economic development, hence it is left with no much option exactly to improve on its hearty amenities and allocate more of its resources to the same. CHAPTER TWO\r\n publications REVIEW In this chapter, we will first consider old theories envisioning the field of the study. This is to appreciate the various aspects that atomic number 18 of meaning in our study as has been developed in theories. In the traditional neoclassical models developed by Robert Solow and Trevor Swan in the 1950s, the output of an frugality grows in response to larger inputs of swell and labor (all strong-arm inputs). Non economic variables such as gracious large(p) or adult male wellness varia bles energise o last in these models.\r\nFurthermore, the thrift under such a model con blueprints to the equity of lessen buy the furthermostms to scale. With these assumptions, the neoclassical out addition models afford some implications to the economy; particularly that as jacket crown caudex subjoins, egression of economy slows down, and in hostel to keep the economy growing it must great(p)ize from the infusions of technological supercharge. It is well cognise that this type of mechanism is the neoclassical model is neither inherent nor does it strive to explain much. In economic lexicon, this simply mean that the technological progress is exogenous to the system.\r\nYet the reality is kinda strange to that, e supererogatoryly in east African countries which unbroken over the eld. This implies that it is not solely applied science which is the of import impulsive force accountable for maintaining such soaring growth performance in the economies yet t here ar other factors which be outside the solid ground of neoclassical growth model. Addressing the above issues, in the mid(prenominal) 1980Ã¢â¬â¢s, a unsanded paradigm was developed in literature, mostly due to the Paul Romer (1986), which is now usually known as Endogenous growth models.\r\nBy broadening the concept of jacket crown to include pieces crown, the brisk endogenous growth model argues that the law of diminishing reappearances to scale phenomenon may not be true as is the case for ontogenesis countries. In fair price, what this means is that if the sign which places in chief city in like manner employs better and proficient workers who ar alike healthy , juvenile not provided will the labor be profitable but it will confusablely be able to use great and applied science more efficiently. This will lead to the questionable Ã¢â¬Ëhicks neutralÃ¢â¬â¢ shift in the production function and thus there can be an increasing earlier than dec reasing returns to enthronisation.\r\nIn other words, technology and forgiving outstanding argon both endogenous to the system. Indeed, the advent of endogenous growth models with human large(p) (improving externalities) find certainly enhanced the understanding of the mysteries of rapid and long sustainable high growth performance of east African economies. Julie Turcotte & Lori Whelwel Reninson overly analyse on technology and human crown. They examined the effects of bringing up, cooking and technology use on productivity and fight at firm level. They made innovative use of statistics in CanadaÃ¢â¬â¢s orkplace and employee survey, which allows the marrying of characteristics of workers in a firm to firm performance measures. They set in motion that productivity is high; the intensively the technology is used in the firm, the greater the proportion of university educate workers, the greater the participation of workers in reproduction programs the greater th e proportion of workers who get reckoner training the greater the firmÃ¢â¬â¢s export orientation. A rouge finding with important form _or_ system of disposal implications is that figurer skills training can augment the qualifications of low skilled workers and consequently boost firm productivity.\r\nFrom the theories, therefore, we can constitutely postu youthful that human corking has a single-valued function to play in economic development of any estate, especially the developing ones like the east African countries; Kenya Uganda and Tanzania. CHAPTER THREE METHODOLOGY OF THE RESEARCH conceptual FRAMEWORK The methodology of carrying out this query is ideally strung-out on the various aspects of human aspects such as human health, reproduction and training. In regard to health, we shall consider the mortality rates of the triplet countries under study.\r\nThis study will and then seek to depict the relationship between mortality rates and the level of economic d evelopment in the collar countries. In venerate to development and training, this study will use the level of teaching method and other skills acquired through training. It will then determine the relationship between precept and training and economic development for each of the three countries under study. Finally, this study will establish the boilers suit tinge of the different trends in reading, training and health on economic development of each of the three countries.\r\nIf we find that there is a positive relationship, then we shall be able to conclude that human capital has a role to play in economic growth and development. On the other hand, if there is a negative relationship, then we dismiss the possibility of human capital playing a role in economic development. RESEARCH MODEL The inquiry model to be developed in this study is that which considers economic growth given by output (y) as a function of both labor and capital, but puts much emphasis on human rather t han physical capital.\r\nWe shall first consider the cob Douglass function given by; Q=Af (L, K): where Q is the level of output, K is the level of capital, L is labor and A is technology. Now, if we assume that the marrow of labor is sufficiently provided and that technology is constant, then capital will be the determinant factor in production. If we break down capital into fixed somatogenic capital and human capital we get; Q=Af (L,Kp,Kh): where Kp refers to physical capital and Kh refers to human capital.\r\nTherefore, output is directly connect to human capital, and we feel to prove this in our study by development applicable variables. DESCRIPTION AND MEASUREMENTS OF VARIABLES The variables to be used in this model will be the dickens major(ip) determinants of human capital. In order t explain the point whether healthy human capital is one of the important factors in explaining the economic development for east African countries, it will be useful to analyze the actual data on these variables across the countries.\r\nAlthough there argon more variables that can represent human capital and healthy conditions of the people of a nation, to keep the analysis simple go, at the same age, capturing the basic broad thrust of these devil variables, this paper will focus on chalk up literacy rate and emotional state liveancy at tolerate. make out literacy rate will give us an over position of what we expect as the boilers suit level of tuition and skill development, while smell history hope at parenthood will determine the level of health among the citizens of a nation. This gives the overall level of human capital which we shall tie to the level of output, growth and economic development.\r\nLife foretaste at birth refers to a measure of overall quality of life in a coarse and summarizes the mortality at all epochs. It can in addition be thought of as indicating the potential return on coronation funds in human capital and is necessa ry for the calculation of various actuarial measures. This gateway exacts the fair(a) number of years to be lived by a group of people born in the same year, if mortality at each age remains constant in the incoming. Literacy rate on the other hand includes a definition of literacy and number bureau per centimeages for the native populations; males and females.\r\nThere are no universal definitions and standards of literacy. Unless otherwise stated, all rates are base on the most common definition Ã¢â¬ the ability to read and write at a specified age. Information on literacy, while not a perfect measure of reproductional results, is in all probability the most easily available and valid for world(prenominal) comparisons. Low levels of literacy and raising in usual can impede the economic development of a sphere in the current rapidly changing, technology-driven world. SOURCES AND TYPES OF DATA The sources of data in our study are basically the inter top, lash notes, l ibrary books and journals and magazines.\r\nWe shall use available data relating to the life expectancy rates and literacy rates from the internet, government documentaries and articles. We shall excessively use lecture notes and library books to get the theories of scholars and undertake them in our study. The types of data will be of second-string nature. It will make data of theories, findings by other individuals or groups, established models and empirical studies. It will in any case include government documentaries and public opinions as established in supplementary data. DATA ANALYSIS\r\nIn analyzing the data, we shall first quantify the value of each variable using the appropriate society preference schedule. We then tabulate the results, establish the graphs, evaluate the results, interpret and vomit up conclusions. In summary, the data analysis will involve a systematic process of putting the variables into quantifiable statistics, evaluating them, interpreting and making conclusions. This will include the use of both geometric and mathematical analysis. SCOPE AND LIMITATIONS OF THE STUDY This study will be carried out deep down Kenyatta university come befores in a level not less than three months and not more than four.\r\nIt will include visits to the library, use of Kenyatta university computers, discussions with Kenyatta university students especially from the school of economics and too consulting lecture notes, perhaps in the study room or in the hostels. There are some limitations to this study erect like any other kind of study. First is the intermittent profit failure in the school computers. There is excessively the problem of inadequate books in the library and the school policy not to allow undergraduate students to entrance money question literals from the Africana section of the library.\r\nWorse still, is the problem of alter coverage of the syllabus content by lecturers and the studentsÃ¢â¬â¢ proclivity not t o cooperate in discussions. CHAPTER FOUR INTRODUCTION The world today is precise different from the one which experienced the two world wars. During the second one-half of the Twentieth century, considerable advancements in science and Technology, along with the establishment of broadly- base Governments and strengthening of institutions, drop led to meaningful Socio-economic progress and improvement in the lives of a large number of people in many countries.\r\nHowever, there are still many others among us who are lagging behind. The current reality in the eastward African region is the existence of epoch-making differences in the state of economic development among countries. For instance, when GNP per capita income is taken as an forefinger of economic development (see frame of reference 1. 1), the kinds for Kenya, Uganda and Tanzania. Fig 1. 1 1999 | KENYA 1600 | UGANDA 1060 | TANZANIA 550 | 2000 | 1500 | 1100 | 710 | 2001 | atomic number 19 | 1200 | 610 | 2002 | 1020 | 1260 | 630 | 003 | 1000 | 1400 | 600 | 2004 | 1100 | 1500 | 700 | 2005 | 1100 | 1800 | 700 | 2006 | 1200 | 1900 | 800 | 2007 | 1700 | 1000 | 1300 | 2008 | 1600 | 1300 | 1300 | 2009 | 1600 | 1200 | 1400 | 2010 | 1600 | 1300 | 1400 | Given the vastly divergent economic development among the three countries, it would be a common fabrication to presume that the discrepancy in development is in some way inherited by the respective groups of countries.\r\nContrary to this general perception, it is quite an enigma to note that, this had not been the case in the past. In fact, foresee 1. 1 understandably turn ins that economic development measured in harm of GNP per capita in the betimes 2000 for these countries pretermit Kenya was quite mistakable and equal to the extent that they were below 1200 USD mark. In light of the above, the pertinent question is: what factors led to this prodigious economic development for some countries (i. e. , easternmost African developing count ries) in the last three decades?\r\nObviously, the factors could be numerous, ranging from accessible to cultural, from economic policies to institution development, geographic status to opportune time. In this paper, however, rather than focusing on all these factors together, which of course is beyond the scope of this study, only the socio-economic factors, particularly the human capital dimensions, are curtly investigated across the group of countries to establish the possible role and linkage of human capital with economic development. humans uppercase AND ECONOMIC DEVELOPMENT\r\nIn inspecting the total literacy rate data for various East African countries in figure 1. 2, it is intriguing to note that flat in the nineties when most of these countries were at alike(p) stages of economic development, Kenya was far ahead of both Uganda and Tanzania. In fact, the total literacy rates for Kenya in 1995 was as high as 78. 1 per cent, 67. 8 per cent for Tanzania and level off Uganda had a rate of over 61. 8 per cent. aft(prenominal) three decades, while Kenya and Tanzania have somewhat ameliorated their human capital, the total literacy rates are still far below 70 per cent in the case of Uganda as shown in figure 1. . During the same finale, however, Kenya and Tanzania have more or less achieved the formidable delegate of educating most of their people. As a result, in the late 2003, the total literacy rate of the Republic of Kenya has distorted 85. 1 per cent and Tanzania managed to achieve a rate of about 78. 2 per cent. Fig 1. 2 | KENYA | UGANDA | TANZANIA | 1995 | 78. 1 | 61. 8 | 67. 8 | 2000 | | 62. 7 | | 2002 | | 66. 8 | 69. 4 | 2003 | 85. 1 | 69. 9 | 78. 2 |\r\nAnalyzing the health variable measured in wrong of life expectancy at birth across the three groups of countries in the East African region, like the literacy rate, again a similar mixed bag of pattern is evident among these countries. For instance, in 2000, all East African countri es had a Life expectancy at birth below 50 years except Tanzania with Uganda having a figure of even much less than 45 years as shown in figure I. 3. On the other hand, during the same period, Tanzania had a life expectancy at birth well over 50 per cent with the Republic of Kenya having a figure almost 50 years (47. 98 years).\r\nIn 2011, although East African countries enhanced their life expectancy to a level of over 50 years, Tanzania and Uganda, in this context, is far more stagnant, as shown in figure 1. 3. In the case of Kenya, the life expectancy rate is now in the order of over 55 years. Fig 1. 3 | KENYA | UGANDA | TANZANIA | 2000 | 47. 98 | 42. 93 | 52. 26 | 2001 | 47. 49 | 43. 37 | 51. 98 | 2002 | 47. 02 | 43. 81 | 51. 7 | 2003 | 45. 22 | 44. 88 | 44. 56 | 2004 | 44. 94 | 45. 28 | 44. 39 | 2005 | 47. 99 | 51. 59 | 45. 24 | 2006 | 48. 3 | 52. 67 | 45. 64 | 2007 | 55. 31 | 51. 75 | 50. 71 | 2008 | 56. 64 | 52. 34 | 51. 45 | 2009 | 57. 86 | 52. 72 | 52. 01 | 2010 | 58. 82 | 52. 98 | 52. 49 | 2011 | 59. 48 | 53. 24 | 52. 85 | What can one infer from the discussions so far? First of all, the empirical data irresistibly incarnate that, in the past decade, the three East African countries considered in this paper started with a similar state of economic development but now, in 2011, there is a marked difference among them on account of their per capita incomes.\r\nKenya is now well beyond the reach of Uganda and Tanzania in 2011 in terms of economic development. Tanzania, on the other hand, is overtaking Uganda as depicted by the economic growth in terms of gross domestic product per capita in 2011 in fig. 1. 2. Secondly, although in terms of per capita income all these countries were quite comparable in the early 2000, nevertheless, in the context of human capital and health firmament development, there were huge differences among them; Kenya and Tanzania were, by far, ahead of Uganda. In the 1990s, most KenyaÃ¢â¬â¢s population were literate while Uga nda and Tanzania still had a long way to go.\r\nThirdly, based on the facts presented earlier, it is evident that the onslaught of East Africa developing countriesÃ¢â¬â¢ rapid economic progress in the 1990s occurred along with their reasonably well developed and healthy human capital endowment which started to take pulsation in the 1960s or even earlier. It is the view of the author that, for human capital to spawn a perceptible impress on economic development, a nation needs to have a nominal captious mass of at least 70 per cent or more literate population.\r\nWhat this means is that if an overwhelmingly large number of people in a ground are literate, even with simple basic breeding as being able to read newspapers, this may open up the minds of the masses, perhaps make them more enlightened workers and perhaps add some element of discipline in them. These are, of course, some of the essential prerequisites for a large organized production to run efficiently and for lead ing to rapid growth.\r\nthrough and through mass literacy, better fain healthy workers and contributory investiture friendly government policies, Kenya and Tanzania seem to have been able to furnish those essential elements of rapid growth at the in truth early stages of their development. And, therefore, at the cockcrow of globalization in the early 1980s, Kenya and Tanzania were befittingly prepared to attract large sums of foreign investments thus accomplishing rapid economic progress. On the other hand, during the same period, unluckily Uganda was neither primed in terms of human capital endowments t large nor were its government investment policies responsive large to allure foreign investors in sizeable quantities to trigger rapid economic growth. Thus, in a mere two decades, Uganda lagged far behind Tanzania and Kenya to the extent that any ginger snaping up in the near future by the former kingdom to the level of the latter countries would be a very challenging onus . As shown by the gross domestic products per capita, Kenya still maintains its steep level of 1600 USD as it was in 1999 and Tanzania has rose fast to 1400 USD from 550 USD of 1999.\r\nOn the other hand, Uganda seems to stagnate around 1300 USD. These results are due to the well developed human capital base depicted by literacy rates and life expectancies of Kenya and Tanzania in figures 1. 3 and 1. 4 respectively. What led to the discrepancy in human capital among nations? As exhibit above, a well developed human capital base of a nation played an important role in economic development and, on this count, Kenya and Tanzania were far ahead of Uganda even at the early stages of economic development.\r\nA germane public policy question, in this context, is how Kenya and Tanzania managed to delude such a well developed human capital base as equated to Uganda even when the per capita incomes for all these countries were rather similar as shown earlier. In other words, for all practi cal purposes, in the 1990s, all these groups of nations could be contemplated as equally exuberant or equally poor, yet in terms of human capital development they were distant by from each other.\r\nWhat led to this significant divergence in the human capital development among these groups of countries? This study argues that it is the didactics of a nationÃ¢â¬â¢s priorities and extractments measured in terms of actual resources devoted towards the education field that led to such differences in human capital among the groups of countries. Since in habituation and now in the new millennium, however, the disparities in per capita expense on both education and health between the three countries are staggering.\r\nFor instance, data from CIA world fact book shows that the KenyaÃ¢â¬â¢s government outgo on education as a dower of gross domestic product in 2006 was 7%. UgandaÃ¢â¬â¢s using up on education as a parting of gross domestic product was 3. 2% in 2009 while that o f Tanzania in 2008 was 6. 8%. The world fact bookÃ¢â¬â¢s data governmentÃ¢â¬â¢s spending on health in the last decade too shows that Kenya spends more as a lot of GDP as compared to Tanzania and Uganda. KenyaÃ¢â¬â¢s spending was 12. 2%, UgandaÃ¢â¬â¢s spending was 8. % while that of Tanzania was 5. 1%. These data show that Kenya spends more of its GDP on health and education than any other east African coarse. Therefore, it is correct to say that a area which is committed to providing education and good health to its citizens is able to make use of its human development in an economically productive manner, hence raising its GDP per capita and its economic growth and development. CHAPTER FIVE GESTATION PERIOD FOR HUMAN CAPITAL INVESTMENT\r\nGiven the acceptation of human capital investments towards Economic development, a pertinent question is whether the time taken or the gestation period of such investments to proliferate intended Impact in terms of literate skilled wor kers is comparable to that of physical fundament investments such as roads, highways and hydroelectric dams. It needs to be underscored that, while the physical stem investments may ordinarily take a long time to be completed, however, the invasion period for human capital investments could be even longer if it is to forge results.\r\nNot only that, while it may even be possible to abbreviate the gestation period of physical home investment by apportioning more resources through borrowing or foreign aid, the same cannot be said for human capital. Notwithstanding of the size and grounds of human capital investments, it will necessitate a fixed number of years (say five years for a essential high school or eighter from Decatur years for secondary education) to shape a generation of educated and skilled labor force.\r\nanother(prenominal)(prenominal) important distinction between physical alkali and human capital investments is that the former type of investment customarily req uires one-time capital expenditures while the latter stratum enjoins investments on an interminable flat coat. For instance, once a hydroelectric dam project is completed, it is expected to generate electricity for a long time without fee-tailing future concentrated capital expenses. On the other hand, to mould a generation of educated workers will entail investments in human capital on an incessant basis.\r\nThus, the return of the social sector investment is a long term continuous proposition and, therefore, its affiliation with economic growth and development should be delved and analyzed inwardly a framework which has a longer perspective. This proposition is too empirically substantiated by the author for Pakistan in two other earlier studies (Pasha, Hassan et al, 1996a, and 1996b). Based on a large, over 200 equations dynamic econometric model of Pakistan, the findings of these studies insinuated that a shift in the investment priority to social development (i. . , edu cation sector) would entail enduring positive impact on economic growth but with long lags of about eight years. The results of the studies further intimateed that, in the short to medium term, the impact of human capital investment on economic growth for the country may not be noticeable; however, after the critical time period of eight years the economic growth for the country will be substantial and long-lasting. CONCLUSION How relevant is this study to public policy?\r\nFirst of all, the study empirically found out that in the past decade, among other things, the east African nations broad based healthy human capital (such Kenya and Tanzania) grew hurrying than the ones with less human capital investment (such as Uganda), where the elements of human health were missing. Thus, the empirical results in this study corroborated the premise that there is an important link between healthy human capital and rapid economic development of any country. This link can be illustrated mathe matically by deriving the cob Douglas function and modifying it to include the aspect of human capital.\r\nIn this sense, we take a countryÃ¢â¬â¢s GDP represented by its output Q as a function of labor, human capital and physical capital. The function is represented by the linear equation; Q=Af (L,Kp,Kh): where Kp refers to physical capital and Kh refers to human capital. Therefore, output is directly colligate to human capital, just as the results of our study have shown. Secondly, the study to a fault found that, under similar economic Predicaments with comparable per capita, Kenya and Tanzania were investing far more in human capital and health sectors on a per capita basis than Uganda.\r\nThis result substantiated the point that it is the commitment and priority of a nation rather than other economic factors all that led to more economic growth and development in Kenya and Tanzania as compared to Uganda. Even when they were all equally endowed with resources, and in fact Uga nda was doing better in earlier years than Tanzania in terms of GDP per capita, but is now lagging behind. Thirdly, it is important to take the fact that there is a distinction between investments in human capital versus physical capital.\r\nThe finding of the study, in this context, upholds the view that, while it is possible to cut down the gestation period of physical al-Qaeda the same outcome, however, may not be possible for human capital investment. Unlike physical infrastructure investment, human capital development investment is a long term as well as continuous proposition. Commitment and public policy are very simple and unpretentious. In the 1990s, most countries in the east Africa were remarkably analogous in terms of their economic development.\r\nHowever, at the dawn of the new millennium, although Kenya and Tanzania have made some economic progress, these countries are still attributed to their earlier copious investments made in human capital. What policy options a nd choices are available to the Uganda under the rule circumstances to improve economic development and to catch up with the other east African countries? It is the view of the author that it will have to adopt similar policy options that Kenya and Tanzania did in the 1960s Ã¢â¬ that is, to deeply commit and heavily invest in human capital development.\r\nThis study has shown that there is no shortcut getable in terms of educating the masses of a nation and in the event these countries demonstrate any laxity in building up a broad human capital base sooner than later. This is believably to be a recipe of postponing the impending quag to a future date. REFERENCES Hafiz Pasha, M. Aynul Hasan, Aisha Ghaus and M. Ajaz Rasheed, PakistanÃ¢â¬Â, Pakistan Development Review Ã¢â¬ 579. , 1996b. Ã¢â¬Å"An unified planning model and expenditure on social development: the case of Pakistan,Ã¢â¬Â 2) Romer, Paul, 1986. Increasing returns and long-term capitalÃ¢â¬Â, Journal of Political Economy, Vol. 94, pp. 1002-1020. Wishart, M. D. , Principles of Microeconomics, 4e, 2005. Stamford, Thomson publishing. Robert, L. H. , The Economic Problem, 2e, 1970. New Jersey, Englewood. http//:www. ciafactbook. com http//:www. gisdevelopment. net Republic of Kenya (1965). African Socialism and its Application to readiness in Kenya, Nairobi. Government press. Todaro, M. P. , Latest edition, Introduction to political economy for a Developing World. Oxford. Chapter 24.\r\nRole of Human capital in Economic Development\r\nIntroduction Our search point is to analyze the relationship between human capital and economic growth. Economic growths important determinant are physical capital, labor and human capital. just from the recent trend of world economic growth, we found that human capital is playing a let on role by taking the place of material capital and labor. Human capital is intimately related to growth as it pluss the nations susceptibility to mystify goods and functi on. It also creates more Job opportunities and lifts the living standards of a country through increase in income levels.Human apital deals with individuals who learn special skills and experience trough education at school, training and experience in the labor market (Barro et al, 2000). However, Economic growth refers to the increase in the amount of the goods and services produced by an economy over time Cones, 1996). As a result of their skills and education, productivity level would increase because educated workers would work at a winged pace than less educated workers Human capital refers to the association and skills embodied in people.It is wide accept that some types of human capital are obtained through experience or nteractions with others and with perfunctory education. Human capital is intimately related to the economic growth. concourse believe that capital means a margin account, stock or factory plants in the industrial area. These are also a type of capital that they are assets that increase income and other useful outputs over long periods of time. but such tangible forms of capital are not the only type of capital.There is another very important type of capital known as human capital. It implies to Schooling, a computer training course, expenditures on medical care, and lectures on the virtues f punctuality, expertise and honesty. It is because these factors are also contributing to raise earnings, improve health, or over all increasing the economic growth rate. Therefore, economists regard spending on training, medical care, education and so on as investments in human capital.They are called human capital because people cannot be separated from their knowledge, skills, health, or values in the way they can be separated from their financial and physical assets. The notion of human capital arose out of the sense that physical capital alone was not lavish to explain long term growth. Many social indicators such as educational enrolm ents and life expectancy became combined in a common term: human capital. Often, human capital is implicitly referred to as formal and informal education.Yet, it can also barricade factors such as the costs of raising children, health costs, and ability. Significance Economic gr n depends on many tactors such as the quantity and quality ot education, how education can impact on fertility rate, government policies to sustain incentives for human capital, a reduction in the cost of technology adoption and increase expenditure on education. gentility and other aspects of human capital is important to economic growth because more educated individuals tend to have high employment rate and earnings and produce more output relative to those who are less educated.Education is considered as a positive investment that allows individuals to be equipped with knowledge and skills that can improve their employability and productive capacities that would lead to higher earnings in the future an d hence, economic growth. merely, it has shown that it is not only the amount of formal education that publications, but also that the type of knowledge ossessed by labor in a region also plays a make role in determining the level of economic activity.There are various type of education having there own effect on the economic growth such as skilled based education primary education change education higher education and education to develop entrepreneur skills, the more the entrepreneurs are in a country, more the business will flourish in that country. As a result, the countrys economy will rapidly grow. The keep growth in per capita incomes of many countries during the nineteenth and ordinal centuries is partly due to the expansion of scientific and echnical knowledge that raises the productivity of labor and other inputs in production.And the increasing assent of industry on educate knowledge greatly enhances the value of education, skillful schooling, on-the-Job trainin g, and other human capital. New technological advances all the way are of teeny-weeny value to countries that have very some skilled workers who know how to use them. Investment in human capital is long term as compare to the investment on physical capital. It is also a continuous process unlike investment on physical capital. But the outcome of human capital is much greater than other investment. In past decades the healthy human capital countries grew faster than the one where these factors were missing.Economic growth closely depends on the synergies between new knowledge and human capital, which is why large increases in education and training have accompanied major advances in technological knowledge in all countries that have achieved significant economic growth. The outstanding economic records of Japan, Taiwan, and other Asian economies in recent decades dramatically illustrate the importance of human capital to growth. We are going to support the positive orrelation of h uman capital and economic development by reference on some earlier conducted queryes.Maudos, Pastor and Serrano aimed to find the role of human capital in the productivity gains of OECD countries form 1965-1990. There research supports the correlation of human capital and economic growth. Their findings suggest a positive the link between human capital and economic development. They reason that human capital not only is an extra input in the production formula but also is a catalyst for technical change. Thus, the inclination of a random translog production unction shows a statistically significant product elasticity of human capital, and non- parametric techniques confirm its significance as input.Xu, Qi came to conclusion in the research conducted in 2008 that human capital is contributing towards good factor production (TFP), which is contributes directly to economic development. They cogitate that human capital had lower impact in technologically strong provinces compared technologically backward provinces. We have seen that human capital have an impact on the growth rate. But there is various bit of human capital. mixed composition of human capital has different impact on the economic growth.\r\nRole of Human Capital in Economic Development\r\nOur research topic is to analyze the relationship between human capital and economic growth. Economic growths important determinant are physical capital, labor and human capital. But from the recent trend of world economic growth, we found that human capital is playing a key role by taking the place of material capital and labor. Human capital is intimately related to growth as it increases the nationÃ¢â¬â¢s capacity to produce goods and services. It also creates more job opportunities and lifts the living standards of a country through increase in income levels.Human capital deals with individuals who learn special skills and knowledge trough education at school, training and experience in the labor marke t (Barro et al, 2000). However, Economic growth refers to the increase in the amount of the goods and services produced by an economy over time (Jones, 1996). As a result of their skills and education, productivity level would increase because educated workers would work at a faster pace than less educated workersHuman capital refers to the knowledge and skills embodied in people. It is widely recognized that some types of human capital are obtained through experience or interactions with others and with formal education. Human capital is intimately related to the economic growth. Masses believe that capital means a bank account, stock or factory plants in the industrial area. These are also a type of capital that they are assets that increase income and other useful outputs over long periods of time. But such tangible forms of capital are not the only type of capital.There is another very important type of capital known as human capital. It implies to Schooling, a computer training course, expenditures on medical care, and lectures on the virtues of punctuality, expertise and honesty. It is because these factors are also contributing to raise earnings, improve health, or over all increasing the economic growth rate. Therefore, economists regard spending on training, medical care, education and so on as investments in human capital. They are called human capital because people cannot be separated from their knowledge, skills, health, or values in the way they can beÃÂ separated from their financial and physical assets.The notion of human capital arose out of the sentiency that physical capital alone was not enough to explain long term growth. Many social indicators such as educational enrolments and life expectancy became combined in a common term: human capital. Often, human capital is implicitly referred to as formal and informal education. Yet, it can also contain factors such as the costs of raising children, health costs, and ability.SignificanceEconomi c growth depends on many factors such as the quantity and quality of education, how education can impact on fertility rate, government policies to sustain incentives for human capital, a reduction in the cost of technology adoption and increase expenditure on education. Education and other aspects of human capital is important to economic growth because more educated individuals tend to have higher employment rate and earnings and produce more output relative to those who are less educated.Education is considered as a positive investment that allows individuals to be equipped with knowledge and skills that can improve their employability and productive capacities that would lead to higher earnings in the future and hence, economic growth. Moreover, it has shown that it is not only the amount of formal education that matters, but also that the type of knowledge possessed by labor in a region also plays a key role in determining the level of economic activity.There are various type of education having there own effect on the economic growth such as skilled based education primary education specialized education higher education and education to develop entrepreneur skills, the more the entrepreneurs are in a country, more the business will flourish in that country. As a result, the countryÃ¢â¬â¢s economy will rapidly grow.The continuing growth in per capita incomes of many countries during the nineteenth and twentieth centuries is partly due to the expansion of scientific and technical knowledge that raises the productivity of labor and other inputs in production. And the increasing reliance of industry on sophisticated knowledge greatly enhances the value of education, technicalÃÂ schooling, on the job training, and other human capital.New technological advances clearly are of little value to countries that have very few skilled workers who know how to use them. Investment in human capital is long term as compare to the investment on physical capital. It is also a continuous process unlike investment on physical capital. But the outcome of human capital is much greater than other investment. In past decades the healthy human capital countries grew faster than the one where these factors were missing. Economic growth closely depends on the synergies between new knowledge and human capital, which is why large increases in education and training have accompanied major advances in technological knowledge in all countries that have achieved significant economic growth.The outstanding economic records of Japan, Taiwan, and other Asian economies in recent decades dramatically illustrate the importance of human capital to growth. We are going to support the positive correlation of human capital and economic development by reference on some previous conducted researches.Maudos, Pastor and Serrano aimed to find the role of human capital in the productivity gains of OECD countries form 1965-1990. There research supports the correlation of human capital and economic growth. Their findings suggest a positive the link between human capital and economic development. They reason out that human capital not only is an additional input in the production formula but also is a catalyst for technical change.Thus, the estimation of a stochastic translog production function shows a statistically significant product elasticity of human capital, and non-parametric techniques confirm its significance as input. Xu, Lai, and Qi came to conclusion in the research conducted in 2008 that human capital is contributing towards Total factor production (TFP), which is contributes directly to economic development. They reason that human capital had lower impact in technologically strong provinces compared technologically backward provinces.We have seen that human capital have an impact on the growth rate. But there is various composition of human capital. Various composition of human capital has different impact on the economic growth. There can b e different composition of human capital agriculture human capital (AGR); high techÃÂ human capital (TECH); business and service human capital (SERVICE); the humanities human capital (HUMAN); and health and welfare human capital (HEALTH). These divisions are do by Chun-li Tsai, Ming-Cheng Hung, and Kevin Harriott in their research conducted in 2010. They concluded that, secondary education is a large contributor to economic growth in developing countries than it is in developed countries.However, they find tertiary education also plays an important role in economic growth equally for both developing and developed countries. The findings also indicate high-tech human capital is positively correlated with economic growth. It indicates that a country should go on greater enrolment in high-tech palm of study, that is, the percentage of tertiary graduates in science, engineering, mathematics and computer science is an important indicator of high-quality labor-force. It provides skill ed and specialized labor to work with hi technology.Daren A. Conrad conducted a research on four Caribbean countries; he divided them in two groups according to the nature of the development. he concluded that countries with high development status in Caribbean which are Barbados and Trinidad & Tobago. The human capital contribution in these countries is high towards economic development in all sectors. However, in less developed countries which includes (Guyana and Jamaica), the human capital contribution is low in tertiary sector because in these countries the human capital is not very much developed because of lack of resources on education compared o developed countries. In the end this research paper does give concrete reasons of dependency of economic development on human capital.Teixeira and Fortuna (2004) in their research paper made a conclusion that the main estimation results emphasize that human capital stock and internal innovation capability (internal stock of know ledge) are important in explaining Portuguese productivity during the period of study which is from 1960 to 2000.Nazneen ahmed and Joseph French had shed light on the casual relationship between growth rate and human capital in developing countries such as Bangladesh. Their studied the Bangladesh economic growth in relation with its human capital. Bangladesh, like other developing nations, depends uponÃÂ production processes that are largely labor intensive. according to Nazneen Ahmad and Joseph French, These results indicates that increases in human capital have a propensity to follow increases in per capita GDP and at the current state of the economy, emphasis on secondary and higher secondary education should be a priority for Bangladesh.Secondary and higher secondary education are imperative because of the labor-intensive nature of the Bangladeshi economy. again this research gives importance to the composition of human capital and type of education imparted to the labor. Skil ls acquired from secondary and higher secondary levels of education are in utmost aim and as their results show, contribute considerably to economic growth in Bangladesh.Musila Jacob and Belassi Walid in their research emphasized on the fact that government expenditure on the human capital can be an important determinant to analyze this relationship of human capital and economic growth. Government expenditure on education would also have an impact on the economic growth. Moreover investment on growth can be represented as the investment on the human capital. As government will spend more on educating the human capital, more will be the skilled labor to positively contribute towards the economic growth of the country. Author investigated that the increase the government expenditure on the education would increase the economic growth. That the average education expenditure per worker positively correlates with the economic growth.LR test indicate that education expenditure in the mod el are wakefully exogenous, suggesting therefore, that they drive economic growth. Government expenditure on education in the long term investment to increases the economic growth of the country. This research clearly proves the point that how human capital contributes to economic growth.Ruth Judson in 1998 tried to find answers to two questions. First, does investment in education help growth; second, does the allocation of investment in education matter? He came to conclusion that if allocation is the done in organized manner in different levels of education, then countries can gain more from human capital.He is assay to make a point that that human capital speeds up the economic development so it isÃÂ necessary that one develops them in best possible manner by allocating appropriate investment in different levels of education. He says that basic education is most important as it lays debut for further education, so it can be concluded that, countries should emphasis greatly o n basic education in order to gain maximum for human capital as human capital is catalyst for economic growth.Ã¢â¬Å"Education is empowerment. It is the key to establishing and reinforcing democracy, and development, which is both sustainable and humane. It is also the only roadway for a lasting peace founded upon the mutual respect and social justice. Indeed, in a world in which creativity and knowledge play an ever-greater role, the right education is nothing less than the right to participate in the modern world.Ã¢â¬Â(UNESCO, 1998).Vladmir tries to prove this relation by using two models. He uses Lucas model and Nelson-Phelps cuddle. The Lucas model establishes that the driving force behind economic growth is the rate of accumulation of human capital. On the other hand, the NelsonÃ¢â¬Phelps approach considers that high levels of human capital increase the capacity of individuals to innovate (by discovering new technology) or to adopt new technology. Thus, again it can be sai d that human capital is one of the major pillar of economic development.Abel J.R and Todd M.Gabe in their research prove empirically the dependence of economic growth on human capital. By using educational attainment as an indicator of human capital, it is found that a 1 percentage point increase in the proportion of residents with a college degree is associated with about a 2% increase in US metropolitan area GDP per capita.ConclusionThrough above discussion it can be clearly claimed that there is a positive relationship between human capital and economic development. They both are directly proportional to each other; weak human capital would slow down the economic growth. On the other hand, strong human capital would accelerateÃÂ the economic growth. Human capital is very important to nationÃ¢â¬â¢s development and it cannot be neglected.Neglect of human capital would negatively impact the economic growth. Furthermore, it can be said that it is important to invest on basic educa tion as it lays foundation for other important skills and further education. Human capital is a resource on which countries build and it should be polished as economic growth is dependent on skilled human capital.\r\n'