Relationship Between Human Capital and Economic Growth: Panel Causality Analysis for Selected OECD Countries

In this study, the relation between education and health expenditures that are accepted as an indicator of human capital and economic growth is tested empirically. According to the findings of the study, based on 1999 – 2008 period for 20 OECD countries that are selected by the panel casuality test, a bidirectional casuality relation is observed between the education and health expenditures and economic growth in the period and country group under discussion. The obtained findings both support the intrinsic growth theories and tally with the empirical studies on the subject. Keywords: Education expenditures, health care expenditure, human capital, economic growth, panel causality.