IMPACT OF EXPENSES ON HUMAN CAPITAL ON THE ECONOMIC GROWTH OF THE COUNTRY: CASE STUDY OF THE REPUBLIC OF KAZAKHSTAN

Analysis of the impact of human capital on the efficiency of the economy of Kazakhstan was based on regression models with the use of statistical data on the volume of investments in professional and higher education, health care, and income per capita, life expectancy, and GDP per capita in 2005-2017. In the current conditions of Kazakhstan, it is found that investments in secondary and higher education and health care have no statistically significant link with the efficiency of the national economy, as well as life expectancy, while income per capita has an impact on economic growth. The low economic effect of expenditures in education and health care may evidence the ineffectiveness of such investments. Spending on higher education does not yet have a significant impact on the change of GDP. This fact indicates that the economy of Kazakhstan has not yet adopted an innovative character. It is necessary to focus on the training of qualified professional personnel at the lower and middle levels, especially on technical specialties.


INTRODUCTION
According to Shultz (1968), the valuable qualities acquired by a person, which can be strengthened by appropriate investments, are called human capital. Shultz considered human capital as the accumulated cost of reproduction of labour regardless of the source of its coverage. The results of such investments are the accumulation of people's abilities to work, their creative activity in society, the maintenance of people's lives, health, etc. According to Becker, human capital (HC) is everyone's stock of knowledge, skills, and motivations.
Investments in it can be those in education, accumulation of professional experience, healthcare, geographical mobility, information search (Becker, 1964). Lim et al. (2018) define HC as the aggregate level of education, training, skills, and health of a population that affects the rate at which technology can be developed, deployed, and used to improve productivity. HC is one of the characteristics of a population that, along with physical capital such as buildings, equipment, and other tangible assets, contribute to economic productivity (Lim et al., 2018).
Within each type of capital, yield and efficiency may vary. Stocks of human and physical capital are produced through a set of investment decisions that are used as costly points of view, direct costs, and for human capital investments, in terms of alternative costs of human time (Goldin, 2016).
Modern HC theory essentially revolves around the interpretation of the investments for the qualitative improvement of HC. The stock of abilities, knowledge, skills, motivation accumulated in the process of education and labour activity, that is, individual human capital, is able to bring returns, being realized in higher labour productivity, in a higher standard of living (Andrade, Duarte, & Simões, 2018;Annabi, 2017;Bilan, Mishchuk, & Dzhyhar, 2017;López Castellano, García-Quero, & García-Carmona, 2018). Directly and positively affecting productivity, human capital is one of the key factors that determine the economic growth and technological progress of the country (Teixeira & Queirós, 2016). At the same time, the impact of human capital on economic growth depends on the demand for education and skills in the labour market. The demand for human capital, in turn, is largely determined by the institutional environment, which determines the basic conditions for economic activity (Gimpelson, 2016).
Human capital can be divided into three key components: health, education, and experience/training; and its supply can be increased by better education, better health, and new knowledge (Ogundari & Awokuse, 2018). Siddiqui and Rehman (2017) argue that education, whether primary, secondary, higher, or vocational, positively impact the economic growth of a country, and governmental spending on education also has a positive effect on the national economy. Therefore, countries that have consistently oriented human capital towards economic growth can better match their investments in growth patterns. Historical data provide irrefutable evidence that public investment in education is economically beneficial and that conditions that inhibit the acquisition of human capital (institutional and public policy, pedagogical prerequisites, financial infrastructure, etc.) are economically destructive (Warburton, 2020). Fatima, Chen, Ramzan, and Abbas (2020) found that human capital accumulation and trade effects are complementary in terms of impacting the economic growth of the country: the higher the level of human capital accumulation, the greater the impact of trade openness on GDP growth.
In a study based on panel data from 52 African countries from the World Bank's World Development Indicators (WDI) for the period 1985-2015, Bane (2018) concluded that investments in education and health positively and significantly affect economic growth in all African countries, and health investments in human capital have a stronger impact than investment in education. At the same time, the research revealed that education stock as human capital does not influence economic growth in all African countries (Bane, 2018).
Using data from 132 countries for 15 years, the research of Ali et al. (2018) concluded that human capital plays a positive role in GDP growth provided there are high-quality legal institutions and better economic opportunities. Better economic opportunities enhance the impact of human capital on growth: the easier it is to do business and trade in the domestic or international market, the stronger the impact of human capital on growth is (Ali, Egbetokun, & Memon, 2018). that the dynamics of HDI of countries corresponds to the dynamics of GDP: the more rapid is the dynamics of HDI growth of a country, the more rapid is the dynamics of GDP growth (Biernacki & Guzek, 2019). The research of Roopchund (2017) also found a direct link and correlation between the HDI and the economic growth of a country. According to the research by Zhang (2019), countries with the best human development index and mobile phone use contribute to national economic growth, and the HDI itself is a critical factor facilitating GDP growth in Asia. Examining the correlation and causal relationship between the HDI and its subindices and economic, water and energy indicators, Sušnik and van der Zaag (2017) concluded that just as the (sub) index can influence the dynamics of GDP, so the GDP itself can influence a certain HDI parameter.

Human Development Index is a statistical indicator periodically composed by the United
Nations and published in Human Development Report. HDI is designed to measure human capital formation and development in various nations of the world (United Nations Development Programme, 2019). It is the combination of "Life Expectancy Index", "Education Index" and "Income Index". The life expectancy index reveals the standard of health of the population in the country; the education index reveals the educational standard and the literacy ratio of the population, and the income index reveals the standard of living of the population.
In other words, human capital is measured by health, education, and quality of standard of living (Škare & Lacmanovic, 2016). Therefore, the components of HDI, that is, life expectancy index, education index, and income index, are directly related to human capital formation within the nation. It follows then, that the most important qualitative characteristics of human capital in the economic sense are the professional qualifications, health, and wealth of individuals (Korotovskih, 2019). And it is most convenient to quantify the influence of the level of human capital on the economic performance indirectly through the volume of expenditures on education, professional in particular, including the costs of retraining and advanced training, health care, and income level of the population (Kpolovie, Ewansiha, & Esara, 2017).

MATERIAL AND METHODS
In the study of the impact of human capital on economic growth five socio-economic  Descriptive analysis, correlation analysis, multiple linear regression, and factor analysis, including calculations, were used to systematize and analyse the collected data.
To analyse the impact of human capital on economic efficiency, the multiple linear regression model using the dependent variable (y) and multiple independent variables (x) was applied for the study: -x5 is life expectancy (LE).

RESULTS
As shown on Fig. 1   In the health-care government financial participation remains virtually unchanged, with a slight decline of 3-4 percentage points by 2017 (Fig. 4). Descriptive statistics for the dependent variable (GDP) and independent variables (SPE, HPE, HC, PI, and LE) allowing to understand the research data is given in Tab. 2.

Tab. 3 shows the results of calculations of correlation coefficients between variables in relation
to the GDP per capita. To check data adequacy, including normal data distribution, absence of autocorrelation, heteroscedasticity, the effect of multicollinearity, etc., relevant tests were performed. The Skewness-Kurtosis (Jarque-Bera) test for normality showed that as soon as the p-value is greater than 0.05, the data follows a normal distribution (Tab. 4).  shows that the study model is well fitted at the 1% level of significance. The results of multiple linear regression allow concluding that the PI variable is influencing the GDP per capita variable, while other variables have no statistical impact on GDP per capita.

DISCUSSION
In Kazakhstan, during the period under review, the financing of human capital development has steadily increased, which is associated primarily with a significant increase in the country's income, primarily due to raw materials industries. At the same time, every year the state was assuming an increasing share of expenses in financing professional education. In conditions when GDP growth is provided mainly at the expense of the raw materials sector (namely energy resources) it is very doubtful to connect the growth of GDP with changes in the financing of the human capital development. On the contrary, the increase in revenues from the commodity sector due to favourable conditions in the commodity markets has led to a significant increase in the participation of the state (both in absolute and relative terms) in the financing of education and health-care (Bilan et al., 2017).
In Kazakhstan the main sources of funding for education and health systems include funds from the state budget, the population, and enterprises, financing from the state budget accounts for the lion's share of all investments in human capital. At the same time, the costs of healthcare from the state budget have a stable positive dynamic throughout the analysed period, while the costs of professional education from the state budget are characterized by certain fluctuations (Korotovskih, 2019).
According to the results of the research, investments in education have no statistically significant impact on changes in the size of GDP per capita. This does not support the findings of the studies of Warburton (2020) and Bane (2018), where the positive influence of investment in education on the economy was revealed. The absence of influence of education financing on economic parameters can serve as confirmation of the idea that the economy of Kazakhstan has not yet adopted an innovative character. The structure of the economy with a bias towards the commodity sectors objectively does not imply its accelerated transition to the innovation path.
And this circumstance limits the need of the economy for highly qualified personnel, especially from the sphere of high technologies. It should be emphasized that these features do not indicate that the Kazakh economy does not need highly qualified personnel. They just indicate that the structure of expenditures in the context of training areas should be brought into line with real trends in the economy (Gimpelson, 2016).
One of the papers concerning issues of human capital development in countries in transition examines the relationship between the quality of human capital and the international competitiveness of European countries with an emphasis on Eastern European countries (EECs) (Mulliqi, Adnett, Hisarciklilar, & Rizvanolli, 2018). In line with orthodox theory, a positive relationship was found between the labour force's level of educational attainment and competitiveness. While in the European Economic Area (EEA17), tertiary education is the only significant education-based determinant of the export market share, in EECs both the shares of the workforce with secondary and tertiary education are significant with the former having a greater impact (Biernacki & Guzek, 2019;Fomina, Sizikova, Shimanovskaya, Kozlovskaya, & Karpunina, 2019). This conclusion regarding the Eastern European countries is not consistent with our finding that in Kazakhstan no relationship is found between the economic growth and the expenditures on secondary and higher professional education.
The choice of factors to explain the behaviour of the response variable largely determines the quality of the forecast. The costs of professional education, as well as health-care, seem to be the most important indirect characteristics of the state of human capital in society. A more accurate assessment of the relationship between expenses on human capital development and economic performance can be obtained if we consider the problem in the sectoral context (López Castellano et al., 2018).
In contrast to the results of Ogundari and Awokuse (2018) and Bane (2018), investments in health in Kazakhstan do not directly impact the level of economic development of the country.
At the same time, it should be noted that the research did not study the influence of the level of education or health care on the economic parameters of the country. The absence of a direct correlation between investments in these spheres may indicate that such investments are ineffective in terms of impacting economic growth. Therefore, research of the influence of quantitative parameters of secondary and higher education, health care on GDP would supplement this research and provide the understanding of the effectiveness of the above investments (Ali et al., 2018).
However, such studies, as a rule, encounter the intractable problem of obtaining and forming a database of reliable and complete data on the analysed economic variables. Any progress in this direction will certainly be very useful both in practical and theoretical terms. For a more informative and adequate assessment of the impact of the quality of human capital on economic efficiency, the analysis should take into account the gender and age distribution of the working population.