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HUMAN CAPITAL AND DEVELOPMENT: SOME EVIDENCE FROM EASTERN EUROPE

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Author(s): Carlei Vittorio | Colantonio Emiliano | Marianacci Raffaella | Mattoscio Nicola

Journal: Annals of the University of Oradea : Economic Science
ISSN 1222-569X

Volume: 1;
Issue: 1;
Start page: 173;
Date: 2011;
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Keywords: human capital | education | health | economic development | multidimensional scaling

ABSTRACT
The concept of development is not only referred to the level or to the growth rate of GDP of a country, but it concerns different aspects of individual life. Development leads to a changing of values, behaviours and attitudes of people interested in it and in the well-being of the whole society. \r\nSince the second part of the last century, more and more economists always assert that human capital is a fundamental asset to promote economic growth and development. Health and education are the two principal ingredients of human capital. There is a strong positive bidirectional relationship between education and health; in fact, it is statistically supported that the two variables move together, so healthy people are more likely to achieve an higher level of education rather than sick people and, vice-versa, more educated people are more likely to enjoy good health status. This generates a virtuous cycle that can lead to greater development. Indeed, health increases people's capabilities allowing achievement in their well-beings, since healthy people can work longer and with higher productivity than poor health people. For this reason individuals income rises allowing them major choices in terms of consumption, savings and investments. Considering the economic benefits that start from health and education, not only at microeconomic level but also for a country, it is important to pay attention to the role of this two variables in the economic development process. There are several channels through which health and education can be associated with better enhancement in economic results. They can be find in the labour market and in the participation in the labour market; worker productivity; human capital investments; saving capacity; availability of save to invest in physical and intellectual capital; fertility choices and structure of population.\r\nThe present paper analyzes the two-way linkage between education and health and their relationship with economic development identifying the conditions of some Eastern European countries. The methodology through which the results are obtained is the multidimensional scaling method which allows to define relations between countries in terms of proximity/distance with respect to the considered indicators, providing a spatial representation of them
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