Role of Human Capital and Trade Openness in Economic Growth: An Analysis from Pakistan

Abstract

Human capital is a significant variable in affecting economic growth and the development of economies. The existing research makes an effort to highlight the effect of human capital on affecting growth of the Pakistan economy. We investigate how human capital influences the growth of the economy. We have used time series data from 1990 to 2024. GDP was taken as the dependent variable. Though human capital, trade openness, and labor force participation were used as independent variables. OLS regression results showed that human capital has enhanced the economic growth of the economy. Moreover, trade openness has affected the economic growth of the economy negatively. Finally, result showed that labor force participation also tended to increase the economic growth in Pakistan. The study suggested for more improved and quality education in Pakistan. In addition to this, there is a need to support youth to partake in the work force. Finally, there should be stable environment in the economy to have more growth and economic development.