Human Capital and Economic Growth in India, Indonesia, and Japan: A quantitative analysis, 1890-2000

Bas van Leeuwen

Thesis abstract 

Human Capital and Economic Growth in India, Indonesia, and Japan: A quantitative analysis, 1890-2000The analysis of endogenous economic growth may be subdivided into two broad streams of theories. The main difference between these two groups rests on whether a country is at the technological frontier. In less developed countries (which are further from the technological frontier) technologies can be adopted from abroad (Lucasian growth). Hence, their human capital is used entirely to apply these technologies in the productive process. As a country develops further (approaches the technological frontier), it becomes increasingly difficult to adopt technologies from abroad and, therefore, more and more of its own human capital must be used to create new technologies (Romerian growth: R&D). The remaining human capital is used to apply these new technologies in the productive process.From this perspective it is not surprising that Japan moved from Lucasian to Romerian growth in the mid-twentieth century. In the first half of the century, Japan witnessed a strong growth of human capital. This led to a strong growth of the industrial sector and an increase in technological development which attributed to the switch to Romerian growth in the second half of the century. India and Indonesia, however, remained dominated by Lucasian growth. Not only was their per capita stock of human capital much lower than in Japan, but it was also less efficient. In addition, these countries were disadvantaged by their late economic development. It was no longer enough to employ enough secondary trained persons to generate technological development. Technological development started to take place at the level of higher education, a level where these countries had a relative disadvantage compared to more developed countries.

Data available in thesis

for a description and sources see "appendices"

Additional data, not available in thesis

Craftsmen and labourers' wages and price indices in India in constant 1913 Rupee, 1800-2000

Working papers based on thesis

See also the Human Capital Hub of the CLIO-INFRA initiative