The effect of human capital on economic growth: The case of Iran’s provinces

Human capital is one of the most important factors in economic growth and it has important role in the inequalities declination. The purpose of this study was to compare the development of Iran’s provinces and also to examine the quantitative effect of human capital on the economic growth in provinces to reply to this question: whether the scientific growth in provinces lead to economic growth? We used economic theories and Panel- Data Model to determine the relationship between human capital and economic growth. The statistical population in this peper was Iran’s provinces that based on the Ministry of Industry, Mine and Trade’s indexes, divide to developed provinces, less developed provinces and non-developed provinces. The relationship between Human Capital and economic growth investigated in period of 2000-2008. The results indicated that human capital index (the number of graduated from universities) had positive effect on economic growth of three groups of provinces. But the effect of human capital on economic growth in developed provinces was higher than other groups. One can articulate that some development gaps among three groups of provinces are related to current gaps in human capital index.