Recently, growth economists regard residual factor mostly as the quality of labor attained by the investment in Human Capital.
But, unfortunately, the discussion of the investment in human capital have mostly been confined to educational capital and knowledge embodied in human population.
By concentrating on education, we are in danger of losing sight of other sources of human capital, and, not seeing their contributions crediting some of them to education.
One of the other sources of human capital is definetly Health.
The objective of this study is to compare the effects of investment in education with those in Health on the economic development of the Republic of Korea.
The model used in this study is based on UZAWA's aggregate production function and is tested by regression analyses with data for 35 cities and 138 kuns in 1978.
The results show that the investment in health and education improves labor efficiency, and that the investment in health is more effective than that in education.
Policy implications of the findings of this study are clear. The investment effects on economic growth of education has long been widely acknowledged. What is needed now is awareness amongs policy makers and scholars that health also has investment effects on economic growth.
