The Effect of Quality and Quantity of Human Capital of Education on Total Factor productivity in Iran's Non-oil Economy

The study of the effect of human capital promotion in terms of education on total factor productivity (TFP) is one of the important topics in the macroeconomic literature and educational policy that has been considered by many economists in recent years. Therefore, in the present study, quantitative and qualitative criteria were selected and weighted by interacting by fifteen university professors in the field of human capital. After constructing the aggregated indicators of quantity and quality of education, the relationship between these mentioned indicators on total factor productivity in the non-oil economy during the period 1986-1988 has been studied. For this purpose, after calculating the total factor productivity index via Solo the remaining method, the effect of quantity and quality of education indicators on total factor productivity has been analyzed. The results of implementing ARDL model while confirming the hypothesis of positive impact of human capital on TFP, showed that the quantity of education has a greater impact on TFP than the quality of education. The positive impact of R&D and production capacity utilization rate on TFP was also confirmed. Due to reduced quality of education in recent years, the need to control the quantitative development of education and improve the quality of education has a higher priority than in the past.