The The Importance of Human Capital to The Indonesian Economy

English

Abstract

This study investigates the development of human capital in Indonesia and its impact on economic growth by examining the causal relationship between education investment, health investment, and economic growth in Indonesia.In this study, dynamic ARDL was applied.The World Bank has provided this data as a secondary source. For the years 2000 to 2020, the following variables will be analyzed using two different time series models. The country's GDP is used as a measure of economic growth in this study. Health investment (HI) and education investment (E) are independent variables of the study because they serve as indicators of how these two variables are related in the long and short term to economic growth. We found that education and health have a causal relationship to economic growth. This is indicated by the influence between education, health and economic growth in Indonesia. Investments in education and health have an impact on economic growth. This is important because education is a driver of human productivity. Education and health are the two main factors in the development of human capital.