Open Access
Article
SciPap-1056
The Effect of Government Expenditure on Human Capital in the Czech Republic
by
Veronika Linhartová 1,* 
1 Faculty of Economics and Administration, University of Pardubice, Studenská 95, Pardubice 53210, Czechia
* Authors to whom correspondence should be addressed.
Abstract: In current thinking, human capital is referred to as a driver of national economies. It encompasses all of the knowledge, talents, skills, abilities, experience, intelligence, and training of a country's workforce. National governments are fully aware of this, and they are seeking to stimulate human capital and encourage its development. A number of studies have shown that public investment for developing human capital is claimed to be the highest performing investment for achieving better economic performance. The aim of this paper is to verify whether government investment in areas that develop human capital can indeed aid its development in the Czech Republic. Using the least squares method, the paper studies whether the Human Development Index showed correlation to individual types of government expenditure between 1995 and 2017. The analysis revealed that in the Czech Republic, spending on recreation, culture, and religion had the largest influence on developing human capital for the period under review. Expenditure on education and health, which most studies cite as the main tools for cultivating human capital, placed only third or fourth regarding their contribution to developing human capital.
Keywords: Economic Growth, COFOG, Human Development Index, Public Expenditures, Creative Labor, Creative Economy.
JEL classification: A11 - Role of Economics • Role of Economists • Market for Economists, C32 - Time-Series Models • Dynamic Quantile Regressions • Dynamic Treatment Effect Models • Diffusion Processes • State Space Models, H42 - Publicly Provided Private Goods, H50 - General
Received: 21 April 2020 / Revised: 24 June 2020 / Accepted: 25 June 2020 / Published: 20 July 2020
