THE IMPACT OF HUMAN CAPITAL IMPROVEMENT ON PER CAPITA INCOME DYNAMICS IN THE CENTRAL AND EASTERN EUROPEAN COUNTRIES

Theoretical and empirical findings confirm the thesis that the accumulation of physical capital partly explains the movement of countries’ economic growth rates. Researchers in the field of development economics, as well as creators of economic policies, are shifting their focus from physical (PC) to human capital (HC) as a determinant of countries’ economic development. The subject matter of this paper is the analysis of the impact of HC on achieving higher per capita income growth rates. According to the “Lisbon Strategy” and the “Europe 2020 Strategy”, HC is placed on a pedestal of importance, all with the aim of making the EU-27 the most competitive market in the world. The empirical part was conducted using a panel regression model. The research results indicate a significant impact of HC on the per capita income of the CEE-10 countries. This research study contributes by reducing a gap in the scientific literature by examining the impact of HC on the per capita income of the European countries. The concluding implications point to the importance of HC development as an effective instrument for ensuring countries’ greater economic growth.