The Growth Impact of Human Development: A Developed- and Developing-Country Comparison

Abstract

Although development is a multi-directional economic variable, its most important aspect is growth: the increase in production and per capita income. It also is marks the economic, cultural, social, and political progress of societies. Although variables such as poverty, income distribution, employment, and the ability to meet basic needs are now more focused issues, this concept has become an important development issue not only from a single economic point of view, but also with its human dimensions. Man is at the center of development; thus, the human development index obtained by combining indicators such as education, health, and income levels are among the most important factors of human life. This is also an important measurement tool for measuring individual quality of life. This study compared two groups of countries by determining the relationship of the human development index of developed and developing countries with growth through panel regression analysis. According to the analysis, when the human development index increases by 1 unit for developed countries, growth increases by 38.7%. For developing countries, when the human development index increases by 1 unit, growth increases by 17.4%. Thus, the contribution of human development to growth is higher in developed countries than developing countries. Therefore, it is important that developing countries implement policies quickly to increase human development.