The Roles of Human Capital Dynamics and Health Status in Vietnam's Economic Growth

Education and health represent essential pillars that serve as fundamental objectives and vital components of development. They are integral to enhancing human capacity, which lies at the heart of a nation's progress and growth. Thus, several studies have focused on the relationship between human capital and economic growth, particularly emphasizing education, and health as crucial development factors. However, most existing studies have mainly explored the one-way interrelation between these developmental factors and economic growth. Hence, this study examines the bidirectional relations of human capital, specifically regarding health and education, on economic growth in Vietnam. The results are based on the 2SLS estimation method and panel data covering 2020–2022. The result highlights the significance of both productivity enhancing dimensions of human capital. Specifically, education and health positively affect Vietnam’s GDP growth. This finding, new to Vietnam, highlights the partial substitution of variables when measuring human capital and its quality dimensions. It contributes to existing literature and underscores the importance of these variables in assessing human capital's impact on growth. Local researchers and policymakers can use this insight to develop better policies for Vietnam's future prosperity.