Human Capital, Social Capital and Economic Growth

Keeping track of the performance of a nation’s economy and analyzing the factors that determine economic growth and its fluctuations are among the main objectives of economic research. This paper presents an analytical framework connecting human capital and social capital to economic growth. It adds to the existing literature in three areas. First, the existing literature focusing on a narrow definition of human capital misses some crucial aspects of human capital policy. This paper provides a broader framework to evaluate both economic and social policies on human capital. Second, while various economic and social indicators related to human capital exist in the literature there is not a comprehensive list of indicators for human capital only. The paper develops a set of such indicators for the purpose of monitoring economic growth and making comparisons across countries or regions. Finally, we identify policy channels through which human capital formation interacting with social capital can be for stronger economic growth.