Human Capital and Growth in OECD Countries Revisited

Based on the “determinants of growth” literature, but drawing on recent developments and using the latest datasets and modern techniques, this paper aims at assessing the importance of human capital for the growth of OECD countries over a prolonged period of time. Special emphasis is placed on factors affecting total factor productivity in a globalized environment, while the specific econometric techniques allow us to account for institutional and other differences between countries. The main conclusion is that human capital is a key driver of growth for the specific group of countries. This result is robust to the choice of estimation methods, while the statistical properties of variables are properly taken into account. Greece is used as a case study in evaluating an economic policy mix in order to accelerate the real convergence process after tackling the consequences of the current crisis.