Comparing Macroeconomic Returns on Human and Public Capital: An Empirical Analysis of the Portuguese Case (1960-2001)

ISEG Economics Working Paper No. 07/2004/DE/UECE

38 Pages Posted: 19 Sep 2004

See all articles by Miguel St. Aubyn

Miguel St. Aubyn

Technical University of Lisbon - ISEG (School of Economics and Management); UECE (Research Unit on Complexity and Economics)

Álvaro Pina

Technical University of Lisbon (UTL) - Department of Economics; UECE - Research Unit on Complexity in Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2004

Abstract

The impact of human and public capital on growth is a major issue in economic theory and in policy evaluation. Using a cointegrated VAR, we estimate a Cobb-Douglas production function for Portugal with public and human capital. Return rates are then computed with and without dynamic feedbacks. Without these, human capital yields a return comparable to private investment, and smaller than public investment. Considering dynamic feedbacks, private capital responds positively to a shock in public capital, but negatively to a shock in human capital. Consequently, the dynamic feedbacks return on human capital is much lower than on public capital.

Keywords: Human capital, public capital, economic growth, Portugal

JEL Classification: I20, H54, O47

Suggested Citation

St. Aubyn, Miguel and Pina, Álvaro, Comparing Macroeconomic Returns on Human and Public Capital: An Empirical Analysis of the Portuguese Case (1960-2001) (June 2004). ISEG Economics Working Paper No. 07/2004/DE/UECE, Available at SSRN: https://ssrn.com/abstract=591969 or http://dx.doi.org/10.2139/ssrn.591969

Miguel St. Aubyn (Contact Author)

Technical University of Lisbon - ISEG (School of Economics and Management) ( email )

Rua do Quelhas, 6
1200-071 Lisboa
Portugal
+351 21 392 5987 (Phone)

HOME PAGE: http://www.iseg.utl.pt/~mstaubyn

UECE (Research Unit on Complexity and Economics)

ISEG/UTL, Rua Miguel Lupi 20
1249-078 Lisboa
Portugal
+351-213 925 912 (Phone)
+351-213 971 196 (Fax)

Álvaro Pina

Technical University of Lisbon (UTL) - Department of Economics ( email )

R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal

UECE - Research Unit on Complexity in Economics ( email )

ISEG/UTL, Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal

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