Impact of Human Capital Formation on Pakistan’s Economic Growth

The term human capital formation indicates the process by which the labor force become the productive. The spending on education, health, knowledge and the skills of the labor force facilitate human capital formation. The human capital formation is very important for the progress of an economy and specially in the labor surplus countries such as Pakistan. The objective of this paper is to find out the impact of human capital formation on the economic growth of the Pakistan over the period of 1985 to 2015. The ARDL econometrics approach was applied for empirical analysis and results found that human capital formation has contributed significantly in Pakistan economic growth. Therefore, we recommend that Government of Pakistan must frame such policies which encourage human capital formation in the country.