The relationship between human capital and economic growth within the framework of new growth theories: A case study of Afghanistan (1980 – 2015)

The concept of human capital, which delineate a combination of level of education, health status, knowledge, skills and aptitudes of individuals, has been well positioned in the literature of economics since the 1960s. Since then, theoretical and empirical studies have considerably exposed the contribution of human capital to growth. In this study, the position and importance of human capital in economic growth has been assessed theoretically and empirically. For this objective, following examining the theoretical framework of human capital and economic growth in this study, time sequences between 1980 and 2015 in Afghanistan have been utilized in order to analyze the causality relationship between human capital and economic growth. In the empirical analysis part of the study, the mean years of schooling and the human development index have been used as the human capital indicator and for the economic growth indicator, gross national income per capita (PPP) has been applied. As a result of empirical study; the direction of the causality relationship between human capital and economic growth varies according to the variables used. According to the results obtained, while economic growth is determined by human capital, conversely human capital is determined by economic growth. Key words: Human capital, economic growth, Afghanistan, causality.