Sustainable development and human capital

Recently, the academic literature has investigated the existence of a direct link between sustainable development and human capital. In following this growing body of literature, the present paper aims to formalise, and then verify, the role of human capital on environmental quality. Precisely, from a theoretical point of view, the work introduces the ecological identity into a basic growth model that is based on human capital. By increasing sensitivity and concern for environmental issues, human capital can reduce the impact of economic activity on the environment, as well as adding its positive effect on economic growth. This key assumption of the theoretical model is empirically tested through a panel analysis on 81 national economies (62 low-and middle-income economies and 19 high-income economies) over a period of more than 20 years. The paper finds a direct and positive link between sustainable development and an advanced stage of tertiary education (namely, a Master’s degree or a PhD). This result could potentially be a good indicator for the future of the environment and for humankind.