| Abstract: | Since World War II, much of the economic growth literature has focused on the contribution of human capital to national development. Two assumptions have remained largely unexamined: (i) economic stability results from economic growth, and (ii) investments in human capital result in economic growth ( ceteris paribus ). This paper questions this education-stability link by examining longitudinal data from France and Germany across 170 years. Results indicate that human capital investment prior to 1945 was a response to economic growth. It is only since 1945 that human capital investments appear to drive economic growth. A shift since 1973 leads to doubts as to whether the post-war human capital-driven growth is being sustained. The results raise the question of whether human capital investment might not be as much a consequence as it is a cause of economic stability in the course of time. |
