MAXIMIZING WELFARE: THE IMPACT OF HUMAN CAPITAL AND GLOBALIZATION IN DEVELOPED AND DEVELOPING COUNTRIES

Abstract

Despite substantial progress in reducing global poverty, a significant portion of individuals in developing nations still grapple with impoverished conditions. The adoption of global economic integration as a development strategy has gained popularity, yet its specific implications for the well-being of the most disadvantaged remain unclear. This research delves into the relationship between education and health, pivotal facets of human capital (HC), and the impact of globalization on both the poverty gap and child mortality rates across 46 developing and developed nations from 2000 to 2020. Employing a System Generalized Method of Moments (SGMM) model to address potential unobserved heterogeneity and endogeneity, our results indicate that globalization contributes to the reduction of poverty gaps and a decline in child mortality rates. Also, the buildup of HC in developing economies increases these positive outcomes.