HUMAN CAPITAL INVESTMENT: ITS IMPACT ON THE ECONOMIC GROWTH OF THE COUNTRY (A Case of Pakistan: 2000 to 2010)

The importance of human capital investment in attracting physical capital and bringing growth cannot be denied by any country while making their policies. Evidently, many nations have accomplished their present state of development by profoundly investing in their human capital. This research paper elucidates the impact of investment in human capital on the growth of the country for the period 2000-2010. To achieve the objectives of the research, secondary data is considered and Cobb-Douglas production function is used to estimate the relation of human capital investment and economic growth of the country. Human capital investment is defined by some of the proxy variables like enrollment rates of primary, secondary and higher education, population per bed, population per doctor, infant mortality rates, and life expectancy. In case, when human capital investment is used as factor of production, all the proxy variables showed positive relation with the growth except population: Per doctor and enrollment rate of secondary education which showed negative relation with the growth. When these proxy variables are combined with employed labour, to make effective labour, only higher education has negative relation with economic growth.