Saturday, December 19, 2009

RELATIONS Between The HUMAN DEVELOPMENT With ECONOMIC GROWTH

RELATIONS Between The HUMAN DEVELOPMENT With ECONOMIC GROWTH
Human Capital is one important determinant in the process of development and economic growth. On the other hand, human development requires resources, such as for funding, which comes from economic growth. In other words, there is a two-way relationship between human development and economic performance

Human capital is one important factor in the process of economic growth. With high-quality human capital, economic performance is also believed to be better. These qualities can be seen from the level of education, health, or other indicators. Therefore, in order to spur economic growth should also be done on human development in all regions in Indonesia. Development policies do not encourage improvement of human quality in each region will only make the relevant regions lagging behind other regions, including in terms of economic performance.

In other words, improving the quality of human capital will also provide benefits in reducing disparities between regions. Based on the above explanation it can be said that between human capital and economic growth there is in fact a relationship of mutual influence. Furthermore, Ramirez et al (1998) mentions that there is reciprocity (two-way relationship) between human capital and economic growth, and it is widely accepted but the specific factors that link it is still less explored systematically.

Based on the above explanation, empirical studies of reciprocal relationships between human development / human capital (human development) and economic performance would be important. Study Ramirez et al (1998) departed from the presence of two-way relationship between economic growth and human development (human development). The two chain relationships intended by Ramirez et al are as follows:

The first is from economic growth to human development.

GNP affects human development, particularly through the activities of households and the government, civil society such as through community organizations and NGOs as well.

In spending his income, households tend to spend the goods that have a direct contribution to human development such as food, water, education and health depends on several factors such as the level and distribution of income among households, who control the allocation of household expenditure. Generally, poor people spend a portion of their income than more wealthy people to the needs of human development and the considerable contribution of women in managing household expenses. When the high poverty level, which due to the low income per capita, or due to poor distribution of income, household expenditures for human development needs to be low. The evidence suggests that economic growth reduces poverty, poverty reduction varies with the distribution of income and changes. Reduction of income distribution and poverty through growth is highly dependent on the process of economic growth, specifically based on job creation and increasing rural incomes.

The role of government allocation of functions to enhance human development is a function of total public sector expenditure, how much public sector expenditure allocation for human development sector, and how these expenditures are allocated. Perananan allocation of public spending by this government is holding a very important role in human development.

The role of community organizations and NGOs play a role as supporter and complement factors in human development, only in a few. Human development will become effective when the role lebik society organizations and NGOs occupy a space of human development.

The second is from human development to economic growth

Watched the two, from human development to economic growth, there is an assumption and is supported by the evidence, that a more healthy community, well maintained and educated will contribute to sustain economic growth. The high level of human development will affect the economy through increased capacity or capability of the community. As a consequence will lead to increased creativity and productivity of society.

It is clear that health and public education is one of the main factors in the composition and the growth of output and exports. Health and public education is also one important factor in building a production system with the use of technology effectively.

Education and good health will encourage greater human capital, encourage increased productivity of society (labor), encouraging the community's ability to adapt and mepergunakan in production technology and improve society's ability to adapt to changing technologies and technical capacity in the industry.

Improving human capital, increased productivity, ability to adapt and use technology in the production and the ability to adapt to changes in technical capacity and the technology will eventually push the economy of the country and promote economic growth. Improving human development also requires a huge investment and also be followed by distribution of the income distribution so that the investment and the income distribution will ultimately facilitate the improvement of education and health development.

Empirically, Garcia and Soelistianingsih (1998) have estimated the influence of human capital variables, as measured by the share of population aged 10 years and over who educated elementary or secondary level, the ratio of students to teachers (to measure the coverage of education efforts and efficient use of resources for education) , the total fertility rate (average number of children born to each woman aged 15 to 49 years). Findings is that the investment for education and health is needed to reduce regional income disparities. While Wibisono (2001) include educational variables attaintment (measured by level of education that successfully ditamatkan), life expectancy (Life Expectancy), the level of fertility (fertility rate), infant mortality rate (infant mortality rate), the rate of inflation and also variable regional dummy for regional economic growth. From the estimates made, obtained findings that the positive effect of variables on growth is education, life expectancy and infant mortality rates.

One important determinant in the process of economic growth is human resources or human capital. On the other hand, human development requires other resources, such as for funding, which comes from economic growth. Thus it can be said that there are actually two-way relationship between human development and economic performance.

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1 komentar:

marry said...

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