Human Capital

Academic Research paper and Study of the Economy of Romania and Romanian Business

The third and last predictor Hi – human capital or availability of qualified labor – is the total number of students enrolled per county in Romania according to INS 2008. A quota of students per county does not seem appropriate as it is the overall available labor force in Romania, which attracts FDI and stimulates business activities in general. The indicator suffers from one outlier, which actually is just a statistical artifact. The county Ilfov has no students enrolled as they are – for obvious reasons – enrolled in the capital: Bucharest. Nonetheless, the data set was not adjusted as it would be arguable how to allocate the numbers among the two units. We just keep in mind that this outlier will lead to an underestimation of human capital in the regression.