Konstantinos Syriopoulos
The existence of a positive impact of human capital on economic growth is not controversial at the theoretical level, while its empirical existence sure is as a number of casual observations of developing economies suggest that investment in education by governments does not always seem beneficial. Mincer in his seminal work (1974) with his human capital earnings function explains wage income as a function of schooling and experience and goes one step further analyzing that further schooling is encouraged if the internal rate of return on schooling exceeds the rate on alternative investments (Mincer, 1981) with foregone earnings as the largest component of schooling costs. Berthélemy, Pissarides & Varoudakis (2000) offer another reason explaining why human capital might have a small impact on economic growth as it happens frequently in developing countries that graduates are more often employed in the civil service (rent seeking) than in production activities. Asteriou and Siriopoulos (1997) showed that the national context of an economy affects strongly the impact of education on economic growth for the country of Greece where the only section of education supporting growth is mid-level technical education. Little or no causal effect was later on detected between incomes and schooling for a time period before, during and after the economic crisis of 2008 in Greece (Kassapi, 2017).