Page 14 - Education and Inclusive Growth --Jong-Wha Lee Korea University

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contribution to per worker GDP growth is smaller than that of physical capital

per worker throughout the period. Compared to that of TFP, it was larger in the
1980s and the 1990s but became smaller in the recent period.

Physical Capital Human Capital TFP Growth Rate

Figure 5.cGrowth Accounting for Per-Worker GDP Growth
of 99 Economies, 1981-2014

These results, however, do not necessarily undervalue the contribution
of human capital. The growth accounting method provides only a mechanical

decomposition, and it is limited to consider the interactions among the
productive components – human capital, physical capital accumulation and
TFP – for output growth. An abundant human capital stock can have a positive
effect on physical capital accumulation and technological progress (Romer,

1990). Conversely, physical capital accumulation and skill-biased technological