Larysa Ivashko
https://orcid.org/0000-0002-3921-9072
Olga Iurasova
https://orcid.org/0000-0001-9976-9124
Oleksandr Maksymov
https://orcid.org/0000-0001-8951-5251
Oleksandr Maksymov
https://orcid.org/0009-0003-7962-9185
ASSESSMENT OF THE RELATIONSHIP BETWEEN EDUCATION, SKILLS AND SUSTAINABLE ECONOMIC DEVELOPMENT BASED ON PCA ANALYSIS
Full text (pdf)
Language: Ukrainian
Abstract. The purpose of this study is to assess the impact of employees’ education and professional skills on economic growth in European countries. The paper analyses current trends to identify the most influential factors driving economic development of countries. The economy is increasingly analysed in terms of the roles of creativity, digitalisation and innovation. Methods for determining the value of human capital are summarised according to criteria such as investment, income, historical and expert assessments. Using principal component analysis (PCA), the study determines the rates of return on education for 20 European countries. Based on the available data, two main components are identified to assess the overall impact of these indicators on GDP per capita growth. These components make it possible to evaluate the contribution of education and employees’ professional skills to the economic development of each country, particularly to GDP per capita growth. The k-means clustering method was applied to classify countries according to the degree to which the main components influence economic development, resulting in three clusters. The first cluster includes developed countries with a high level of innovation, the second – developed countries with a lower level of innovation and average returns to education, and the third – countries with predominantly non-innovative sectors. Regression models are subsequently built to analyse the impact of each component on GDP per capita growth and to determine the extent of that impact. Based on a comparison of the coefficients of the constructed regression models, it is concluded that the relationship between the level of education and economic growth in a number of European countries becomes more pronounced under the condition of the development of the innovative and technological components of the economy.
Keywords: human capital management, economic growth, sustainable development, principal component analysis, level of education.
https://doi.org/10.32987/2617-8532-2025-2-91-113
Keywords: human capital management, economic growth, sustainable development, principal component analysis, level of education.
https://doi.org/10.32987/2617-8532-2025-2-91-113
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4. Azmat, G., & Britton, J. (2024). Labor market returns to higher education. Oxford Research Encyclopedia of Economics and Finance. DOI: https://doi.org/10.1093/acrefore/9780190625979.013.660.
5. Patrinos, H. (2024). The returns to education. Greece – Europe 2030: Education, Research, Innovation, New technologies, Institutions and Sustainable Development, Proceedings of the 3rd International Scientific Conference, 3, 1-14. DOI: https://doi.org/10.12681/elrie.7034.
6. Al-Hasnawi, M., Chin, L., Mazlan, N. S., & Ahmad, M. (2024). Evaluating the role of institutional quality in the relationship between education expenditure and manufacturing growth: insights from quantile regression models. Advances in Social Sciences Research Journal, 11, 242-260. DOI: https://doi.org/10.14738/assrj.119.17617.
7. Koenker, R., & Bassett, G. (1978). Regression quantiles. Econometrica, 46(1), 33-50. Retrieved from http://www.econ.uiuc.edu/~roger/NAKE/rqs78.pdf.
8. Becker, G. S. (1993). Human capital: a theoretical and empirical analysis, with special reference to education. Chicago: University of Chicago Press. DOI: https://doi.org/10.7208/chicago/9780226041223.001.0001.
9. Becker, G., & Chiswick, B. (1966). Education and distribution of earnings. American Economic Review, 56, 358-369.
10. Zafar, M. B., & Jafar, A. (2024). Human capital and Islamic banking: a systematic literature review. Journal of Islamic Accounting and Business Research. DOI: https://doi.org/10.1108/jiabr-11-2023-0376.
11. Nelson, R., & Phelps, E. (1966). Investment in Humans, Technological Diffusion, and Economic Growth. The American Economic Review, 56, 69-75.
12. Romer, P. M. (1989). Endogenous Technological Change. Journal of Political Economy, 98, 71-102. DOI: https://doi.org/10.1086/261725.
13. Romer, P. (1990). Human Capital and Growth: Theory and Evidence. Carnegie-Rochester Conference Series on Public Policy, 32, 251-286. DOI: https://doi.org/10.1016/0167-2231(90)90028-J.
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23. Fan, Y., Yi, J., & Zhang, J. (2021). Rising intergenerational income persistence in China. American Economic Journal: Economic Policy, 13, 202-230. DOI: https://doi.org/10.1257/pol.20170097.
24. Zou, W., & Ma, R. (2024). An extended family perspective on intergenerational human capital transmission in China. Social indicators research, 174, 1101-1139. DOI: https://doi.org/10.1007/s11205-024-03427-3.
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26. Becker, H. S. (1967). Whose side are we on? Social Problems, 14(3), 239-247. DOI: https://doi.org/10.1525/sp.1967.14.3.03a00010.
27. Becker, G. S. (1964). Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. Chicago: University of Chicago Press. Retrieved from https://www.nber.org/books-and-chapters/human-capital-theoretical-and-empirical-analysis-special-reference-education-second-edition/front-matter-human-capital-theoretical-and-empirical-analysis-special-reference-education.
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29. Mood, C. (2017). More than money: social class, income, and the intergenerational persistence of advantage. SocioLogical Science, 4, 263-287. DOI: https://doi.org/10.15195/v4.a12.
30. Richard, O. (2000). Racial Diversity, Business Strategy, and Firm Performance: A Resource-Based View. Academy of Management Journal, 43, 164-177. DOI: https://doi.org/10.2307/1556374.
31. Hitt, M. A., Bierman, L., Shimizu, K., & Kochhar, R. (2001). Direct and Moderating Effects of Human Capital on Strategy and Performance in Professional Service Firms: A Resource-Based Perspective. The Academy of Management Journal, 44(1), 13-28. DOI: https://doi.org/10.2307/3069334.
32. Sakamoto, T. (2017). Four worlds of productivity growth: a comparative analysis of human capital investment policy and productivity growth outcomes. International Political Science Review, 39(4), 531-550. DOI: https://doi.org/10.1177/0192512116685413.
33. Juanhua, M., & Donglin, Xu. (2025). China’s Economic Growth from a Comprehensive Analysis Perspective: A Synergistic Application of GRA, PCA, and GRU Models. Journal of Economics and Management Sciences, 8(1), 1-15. DOI: https://doi.org/10.30560/jems.v8n1p1.
34. Riyadi, D., & Hendajany, N. (2023). Mean years of schooling inequality and return on education: analysing the main determining factors. Journal of Economics and Sustainability, 5(1), 43-58. DOI: https://doi.org/10.32890/jes2023.5.1.4.
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39. Gariba, M., & Prokop, V. (2024). Does Women in Politics and Income Inequality Affect Social and Economic Well-Being? Insights from OECD Countries. Journal of the Knowledge Economy, 1-22. DOI: https://doi.org/10.1007/s13132-024-02203-5.