The Path of Education and Healthcare Investment in Human Capital via the Socioeconomic Development of Thailand

Abstract

This research aims to 1) investigate the pattern of causal relationships among human capital investment, related socioeconomic factors, and economic development in Thailand; and 2) analyse and compare the effect of educational and healthcare investment on economic development. The path analysis approach is employed using data from 2001–2012. The findings show that 1) education and healthcare investment indirectly determine GDP per capita and Thai well-being through four social variables and three economic variables. Therefore, both cognitive and non-cognitive human capital can be sources of economic development. For the result of objective 2), the total effects show that healthcare investment has a comparatively greater effect on GDP per capita than educational investment. However, healthcare has a lesser effect on well-being than educational investment. Thus, educational investment is still important for Thailand’s economic development. Besides, the longevity of labour and educational access opportunities at secondary level were found to be significant intermediate socioeconomic factors for the transmission of human capital to the economic development of Thailand. The policy choices for fostering human capital accumulation and economic success are to increase the government’s health budget and encourage people to take care of themselves. From the educational aspect, in order to increase the potential for economic development, the quality of education should be concentrated. Acquisition of the requisite labour skills should be the expected educational outcome.