Rethinking the role of human Capital in Growth Models

What role does education play in economic growth? Conventional wisdom and macroeconomic theories posit that as a nation becomes more educated, they become wealthier. The basic argument says a more educated populace is more productive (i.e. the quality of human capital increases) thereby increasing economic output. However, the majority of empirical work done on this topic has not found a strong relationship between education and economic growth. The purpose of this paper will be to identify where this body of research went wrong and offer theoretical insights ignored by this literature based in market-process theory tradition. It will draw upon an existing body of research (both empirical and theoretical) that fits within this theoretical paradigm as well as suggest a path forward for researchers in this field.