Education Human Capital Accumulation and Economic Growth

The supply of human capital in production activitiesis a function of the quality and volume of educationservices provided at the basic and tertiary levels inthe education system. Accordingly the allocation ofresources by government to education is an importantdeterminant of human capital formation. Moreoverdepending on its level-specific variations a givenamount of human capital can have differential impactsacross sectors and on economic growth.Noting that the accumulation of human capital may beof greater importance than the accumulation ofphysical capital this study posits that governmentspending on education can be identified as animportant indicator of human capital formation thatin turn propels economic growth. This study examinesthe level-specific impact of human capital oneconomic growth in four Caribbean countries using theLucas (1988) model for its theoretical underpinnings. It was found that human capital at the tertiary levelin countries with lower performance indicators had anegative impact on economic growth whereas humancapital at the basic level in countries with lowerperformance indicators had a positive impact oneconomic growth.