Atiq-ur- REHMAN Abdur RAUF Ghulam Yahya KHAN


Production takes place by a combination of Human and Physical Capital; therefore, Human Capital is expected to be a main contributor to the economic growth. However, many studies failed to discover significant association amongst Human Capital – Growth, and many other found very small marginal contribution of Human Capital to the growth. Several economists have tried to explain this paradox. This study brings forth skill mismatch as another potential explanation of the weak relationship between education and growth. This study shows that skill mismatch can wipe out potential advantage of the increase in Human Capital. Most of countries have never taken skill mismatch seriously; therefore, there is no systematic data on the indicators related to skill mismatch. This paper emphasis the need of having reliable and sufficient data on the indicators of skill mismatch, so that planning for the better utilization of human capital could be made.