• Kamran Khan
  • Samina Sabir
  • Farha Zeba Ibrahim
Keywords: Human Capital, Panel Data, Employment, Income Inequality, Inclusive Growth


This study examines the effects of human capital development on inclusive growth (IG) of developing countries. A surge in human capital (HC) rises the efficiency of workers that have spillover impacts on economic growth over the period 2000-2014. These effects trickle down to the lower segment of the population through job creation that lifts poor people out of poverty. This study uses panel data of 19 developing countries to explore the impacts of human capital on dynamic indicators of IG such as economic growth, employment, income disparity and poverty using the generalized method of moment (GMM) to tackle the problems of serial correlation, endogeneity and excluded variables bias. The outcomes of this study reveal that human capital has increasing effects on economic growth and employment while decreasing effects are observed for income inequality and poverty. Therefore, there is a need to enhance human capital development in developing countries to achieve the target of inclusive growth.


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