Trends in human capital investment in Pakistan

Trends in human capital investment in Pakistan In this paper I will investigate the relationship between the human capital and economic growth in Pakistan over the years. Human capital refers to the set of skills which are required out of employees assigned with their own specific tasks. The skills through which they achieve perfection in their areas of expertise is through training and experience which increases the value of the employees in the market and make them more expensive for the companies. Human capital has developed over the years in Pakistan accounting to three major factors: y Learning by doing (experience) y Education (formal or informal) y Training (formal or informal) The decision for employing human capital in Pakistan aids decision making for investment in human capital and it also helps in getting returns from the already accumulated human capital. Human capital plays a key role in neoclassical model and endogenous growth model. Economic growth according to the neoclassical model in Pakistan is still driven by exogenous technological progress over the years. This progress can change in response to policy. Constraints through policy may come in the form of taxation, or entry barriers and they end up creating differences in the aggregate performances of each country. A possible reason for low economic growth in the human capital sector in the initial years of Pakistan were accounting to the fact that schooling and health services in such developing countries as Pakistan itself tend to be of low and variable quality. The largest learning gap is between the primary school of Pakistan. The principle factor which led to the negative correlation with economic growth in Pakistan are the magnitude and effectiveness of public education spending and the ways in which taxes are levied. This leads to low per capita output as the public spending crowds out private spending on education. In

Trends in human capital investment in Pakistan

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