Human capital management: The impact of well-being on economic performance in Organisation for Economic Co-operation and Development (OECD) countries

Abstract

Understanding the relationship between human well-being and economic competitiveness is paramount to guide sustainable development policies. This research studies the impact of three well-being dimensions —health expenditure per capita, Human Development Index (HDI) and Happiness Index— on economic productivity measured through GDP per capita in OECD (Organization for Economic Co-operation and Development) countries. This study aims at determining the influence extent of these variables in the economic competitiveness and human capital efficiency, being the main contribution empirical evidence for the implementation of strategies that include well-being as development driving force.The research is based on human capital model (Grossman, 2017) and the approach of development as freedom (Sen, 1999), both highlighting the importance of health, education and quality of life in productivity. Based on a multiple regression model applied to 272 observations to The Global Economy database, findings reveal that health expenditure per capita and HDI have a positive and significant effect on GDP per capita (p < 0.05), which is considered an estimate indicator of economic competitiveness, while the Happiness Index does not evidence a statistically significant relationship. These findings confirm that investing in health and human development are key to determine economic competitiveness and highlight the need to include well-being indicators in sustainability and growth strategies of countries.