The relationship of human capital and economic growth: The case of Turkey

This study aims to investigate the relationship between human capital and economic growth for Turkish economy both theoretically and empirically. The empirical analyzes were carried out by the use of annual data related to the 1990-2019 period of the Turkish economy. Human capital was measured by the human development index. The cointegration relationship between the variables was tested by using the Bound Test. The short-term and long-term relationships of the variables were examined by Autoregressive Distributed Lag Model (ARDL) estimations. In addition, the causality relationship of the variables was determined by using the Toda-Yamamoto Causality Test. According to the findings of the empirical analysis, it has been determined that there is a cointegration relationship between human capital and economic growth. The results from the ARDL model estimations indicated a significant and positive long-term impact of human capital on economic growth. According to the error correction model results, the short-term effect of human capital on economic growth is uncertain. The causality analysis results demostrated that there is a unidirectional casual relationship from economic growth to human capital. Keywords: Economic Growth, Human Capital, Bound Test, ARDL Model, Toda-Yamamoto Causality Analysis