Development Of Methodology for Assessing Environment and Human Capital

Abstract

© 2020. All Rights Reserved. Air pollution, water pollution and soil contamination have been worldwide health perils in most developing countries. Greenhouse emissions are swiftly increasing, which intensifies their environmental health issues. While it has been well documented that pollution exposure increases health risks, much less is known about its impact on other critical dimensions of human capital and well-being. The article proposes a methodological approach and develops a methodology for assessing the relation between environment and human capital. The authors established a close statistically significant correlation of per capita national wealth and stocks of per capita human capital, per capita human capital and GDP per worker, as well as per capita human capital and per capita GDP. Based on the evidence of the dominance of the human capital input to gross output, a hypothesis has been put forward and substantiated according to which human capital has higher productivity compared to other factors of production. Based on an empirical analysis of the World Bank dataset for 142 countries, the article proves the inverse relationship of human capital productivity and environmental issues, measured as the quotient of dividing per capita GDP by per capita human capital. The maximum return on GDP per capita is shown by the Senegal economy, as the economy with the smallest stock of human capital, the minimum - the economy of Iceland, the leader in terms of human capital stocks.