Working Paper Series: Special Edition of 2016 to 2018 Interns

Human Capital as a Tool for Growth: The Case of St Vincent and the Grenadines 1970-2014

Dalano R. DaSouza University of the West Indies Cave Hill Campus

Abstract

Human capital development has long been mooted as a vehicle for achieving socio-economic progress through the improvement of key indicators such as literacy, unemployment, poverty reduction, and Gross Domestic Product.. This paper utilises an Error-Correction Model (ECM) to determine whether the increase in resource allocation to education over the period has brought about tangible returns to the economy of St. Vincent and the Grenadines (ST VINCENT AND THE GRENADINES) over the period 1970-2014. Results show that education has been an important variable to spur growth and the country’s development. Changes in the primary school labour force participation rate recorded the greatest magnitude but had an inverse relationship with GDP growth, while secondary and tertiary education contributed positively to economic growth. Both labour accumulation and improvements to the quality of labour employed contributed more to growth than physical capital accumulation.

Keywords: St Vincent & the Grenadines, human capital, education, economic growth

JEL Classification Code: H52, I26, J24, O41

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