EFFECT OF HUMAN CAPITAL AND TECHNOLOGY ON ECONOMIC GROWTH

Abstract

Investing in human capital in the past has been the subject of debate on economic policy as one of the important elements for the creation of modern knowledge-based corporations. The theory of human capital inves- tment is viewed as a result of voluntary decisions of individuals who expect a certain return on investment of time and resources. In the last twenty years there has been an increase premiums for education, which is attributed to the rapid technological development in transition countries during the last decade has seen rapid convergence of the premium on education egalitarian salary structure based on salary structures such as those in developed markets.

Unlike those countries, the premium on education in Bosnia and Herzegovina has not yet converged towards premium in advanced market economies. Accordingly, Bosnia and Herzegovina, despite some increase in the number of students, still lags behind the developed countries, and the gap is even greater if one takes into acco- unt the number of students who complete their studies. To the reduction of this backlog, it seems, does not contribu- te either a high level of total spending on education, which is consistent with the allocation to education in the deve- loped economies.