ROLE OF HUMAN CAPITAL AS A DRIVER FOR SUSTAINABLE ECONOMIC GROWTH IN WESTERN BALKAN COUNTRIES

Abstract

Objective: The objective of this study is to investigate the impact of years of education and life expectancy on the economic development of the Western Balkan Countries (Southeast Europe). Theoretical Framework: This study considers the impact of exogenous and endogenous theories of economic growth, with a particular focus on the role of human capital (human resources) in driving economic development. Method: We have proposed a panel data regression methodology in which the dependent variable is the GDP per capita. The countries analyzed are covered from 2012 to 2021 and the total number of observations in the panel is 50. This study used secondary data from the WorldBank databases. Findings: The results reveal a positive correlation between the Education Index and Labor Force Participation, while the Gross Enrollment Rate in Tertiary School and Life Expectancy show a negative correlation. Research Implications: The demographic, economic, and educational conditions in the Western Balkan countries required immediate action by policymakers to avoid a situation that cannot be sustained over the medium or long term. The governments of these nations must take action to shift the focus of higher education to a more qualitative approach.