HUMAN-CAPITAL AND ENDOGENOUS GROWTH EVIDENCE FROM TAIWAN

We examine the empirical implications of models that display perpetual growth through human capital accumulation in a case study of Taiwan. Our results show that incorporating a labor quality index into the labor input improves the performance of the growth model in Taiwan over the 1965-89 period. The results are robust to alternative enhancements to raw labor input measures and to the inclusion of additional relevant variables often correlated with economic growth in developing countries. The evidence supports the theoretical suggestion that labor skill is a useful augmentation of the raw labor measure commonly used in empirical growth studies.