Effects Of Human Capital Accumulation On Economic Growth In Kenya

Abstract

The importance of Human Capital accumulation for both social development and at individual level has been acknowledged in both developing and Developed Countries. Human Capital theorists have listed benefits ranging from indirect, invisible and non-quantifiable. Education enhances individual knowledge and skills for a higher productivity, better employment and more so getting higher salary and prestige. The Country's human capital in production process is a function of the Volume and quality of education administered at the Primary, secondary,college levelsand government expenditurein the education system. As a result, the government's allocation of resources to education is of utmost importance in determining its human capital stock. This study posits that the four human capital accumulation factors, Specific Level Primary HCA, Specific Level Secondary HCA, Specific Level Tertiary HCA and Government Expenditure on Education all affect economic growth. The Government Expenditure on Education has been identified as propelling the highest impact on the GDP growth rate.Given this information, policy makers can therefore consider opportunities for enhanced budgetary allocations aimed at building Human capital thatresults in well skilled labor that propels economic activity and efficiency in the output, opening up opportunity for entrepreneurship and attracting investment in the Country.