Relationship between Human Development and Economic Growth in Turkey

Abstract

Until 1970s, economic development and growth were used synonymously, and the level of development was measured by nominal measures. After 1990s, especially with increasing importance of sustainable development, important steps were made to ensure that development should be individual-centered and human-oriented, which led to the creation of “human development” concept. Human Development, as an indicator of individual’s standard of living and welfare, is also seen as an important input for economic growth. On the other side, economic growth provides financial opportunities to increase the level of human development. This study undertakes the relationship between human development and economic growth with the data covering the period 1971-2019 in Turkey. In this context, in accordance with the United Nations methodology, the Human Development Index for Turkey (1971-2019) was created within the scope of this study. This index was used as a human development’s indicator in Turkey. Method of the study is based on the conceptual framework discussed in Ranis et al., (2000) and also includes variables of public health and education expenditures, Gini index and investment rates. Data was obtained from the WB, UNESCO and TurkStat databases. Study aims to undertake two-way character of growth and human development relationship in a theoretical framework as well as modeling and testing it with the time series econometrics’ tools. After the series are tested with unit root tests, the relationships between variables will be estimated by ARDL Bounds test, and the results will be interpreted according to the findings and also suggestions will be presented.