Human versus physical capital: issues of accumulation, interaction and endogeneity

摘要: The human capital and physical are inextricably linked. Increase in the is assumed to affect stock of vice versa. This paper examines impact increase on accumulation versa for a panel 237 countries during period 1971–2015. We also analyzed interaction between these two types capitals after disaggregating by their income level. used 3SLS fixed effects estimation methods obtain consistent unbiased results presence endogeneity. found that investment positively affects capital, but not uniform. additional factors such as democracy, trade openness ethnic fractionalization moderated level economic development countries. Results suggest order accumulate subject resource constraints, low must focus largely primary education while high should invest secondary more importantly tertiary levels education.