The role of the human capital in the economy is highlighted in several studies of human capital, endonegneous growth and macroeconomic literature. A special part of this literature is dedicated to the mechanism and the various channels through wich human capital influences economic growth. As expression of the macroeconomic performance, the labour productivity depends on the accumulation of human capital in the economy. To analyze and discuss this dependency is essential for appropriate human capital policies aiming to stimulate the human capital accumulation in the economy and the enhancement of the labour productivity.

The paper explores the link between labour productivity and the estimates of the human capital stock in the EU countries.

Human capital theory explains the labour productivity level by the workers\’ level of educational attainment level. Four different effects of human capital on labour productivity can be found in economic literature: worker, allocative, difusion and research. Other researchers used a production function to estimate the productivity impact of changes in educational attainment.

Research on the impact of human capital on productivity at the country level encountered many difficulties over the years. The main methodological issue is how to measure skills and human capital investment and to model possible channels of skills of influence the economic performance. The UNESCO attainment levels and enrollment series and other data sets, constructed by researchers, have been used in a large number of empirical studies of the link between education and productivity.

What is innovative in the present study is the estimation of human capital stock based on educational costs by level(primary, secondary, tertiary) weighted by the proportion of labour force with corresponding educational attainment and the testing of linear regression model for the dependency of labour productivity on human capital stock.

The assumption of the study is that the labour productivity is strongly and positively correlated with the human capital stock in the european economies. In order to confirm this, the following steps were completed: First, the appropriate method to estimate the human capital stock in the economy was identified and then, the estimations were calculated for the EU\’s countries, based on EUROSTAT data. Second, the correlations between statistical indicators of labour productivity and estimates of human capital stock, for each european countries were identified and discussed. Third, a regression linear model was tested for each of 22 european countries included in the study.

A strong correlation between labour productivity and human capital stock, statistically tested through regression equations with data from EUROSTAT, was found. The variation of labour productivity can be explained in proportion of 85-95% by the variation of human capital stock, considering all other factors as constant.

The added value of the paper consists of: (i) the estimation of human capital stock using the educational costs method for the european countries; (ii) the use of these estimates to show the correlation with the labour productivity levels and (iii) testing econometrical models of the dependency between labour productivity and human capital stock in 22 european countries.

An interesting and useful task for future research is to explore the details of the institutional and incentive structure that best allocates a fixed amount of educational expenditures