The Role of Human Capital in the Structural Change Process

The main of this paper is to verify if human capital is an important determinant of structural change in the different sectors of the economy and if it can accelerate the speed of this structural transformation. This paper contributes to the literature once it develops an empirical test of the model proposed by Li et al. (2019) and it uses the generalized method of moments (GMM) which considers the problem of endogeneity found in human capital variables, it also uses two proxies for human capital and structural change in order to verify whether or not they affect the variable of interest and also to provide robust results. Results showed that human capital has an essential role in the structural transformation process of the economy, since it has an effect on the relative participation of the sectors on total added value or on total employment. Also, human capital proved to be a potential accelerator of this structural transformation