Impact of human capital development on productivity growth in EU member states

Abstract

Abstract. In this research, we investigate the impact of human capital on labour productivity in European Union member states using panel data analysis. Results of the paper are estimated using the Pooled ordinary least squares (OLS) and Fixed effects model (FEM). Te results show that human capital is positively signifcant in improving the growth of labour productivity in the EU. Our estimates also suggest that the impact occurs after three times lags in case of education expenditure.