Ugur Filiz- Szent Istvan University, Gödöllő, Páter Károly u. 1, 2100, Hungary


5th International Conference – ERAZ 2019 – KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT, Budapest – Hungary, May 23, 2019, CONFERENCE PROCEEDINGS

Published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia
Conference partners: Faculty of Economics and Business, Mediterranean University, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia;

ISBN 978-86-80194-20-2, ISSN 2683-5568, DOI:


Even though the emergence of the human capital theory was shaped in the context of microeconomics,
it was applied to macroeconomics eventually by the implementation of the microeconomic
production function at the national or economy-wide level. There are several economic growth models
introduced in the literature on this matter over the years by placing aggregate production function
in the center of their models, which lay the foundation of studies focusing on economic development.
However, development of ‘new growth theory’ particularly draw attention to the relationship between
human capital and growth that is followed by the efforts aiming to bring an explanation to the differences
of growth across countries by considering several possible variables of growth.
New growth theory attempted to bring an explanation to the process of economic growth in the long term
through endogenous forces such as human capital, knowledge and information technology which also
constituted the foundation of today’s modern economies. Economic growth has been linked to an increase
in knowledge, quality, and diversity of human capital rather than just a cumulative increase in the labor
force. Consequently, human capital has been recognized as one of the significant factors in the process
of economic growth in the literature, considering its positive contribution to creating more output in
growth. However, it is noteworthy to state that literature on this topic seems to constitute some weaknesses
methodologically and conceptually as well as empirical researches due to revealing reverse results.
In this context, this paper aims to conduct a literature review to develop an understanding of the human
capital concept and its importance in economic growth. Accordingly, the concepts of human capital
and economic growth are analyzed theoretically by showing findings of some research in the literature
on the relationship between both variables which indicated that human capital could have a significant
positive impact on economic growth. As of theoretical character of the study, the paper is based on the
systematic review of the literature on theories of economic growth by making use of secondary data like
journals, papers, websites and various magazines as the primary sources to bring an explanation to the
correlation between both variables.

Key words

Human capital, economic growth, human resources.


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