The Effects of Human Capital on Investment

Abstract

Today, human capital, created through education, is growing at a higher rate than physical capital. In addition, the small and insignificant depreciation of human capital and its longer life than physical capital has caused human capital to grow more and more. Improving the quality of human capital through education boosts production and investment, especially private sector investment. On the other hand, investment is one of the macroeconomic variables that has been noticed by economists with different approaches in recent decades. Basically, the contribution of investment in the national net production in a period of time can show the economic status of a country. According to imprtance of subject this study examining the effect of social welfare costsand education costs of government on private sector investment over the period 1975- 2023 in Iran with using VAR model. Convergence vectors estimated with Johansen method. The empirical results show that social welfare costs of government has negative impact and education costs of government has positive impact on private sector investment.



Keywords: Human Capital, Government, Investmen