2.1. Labour
Labour is neglected in the formulation based on factors as follows:
1. Labour has played a relatively minor role in economic growth in 20th century compared to other factors.
2. Found that quality differences in labour are significantly related to output differences. Scott proposed that such quality differences are traditionally incorporated into TFP when not explicitly accounted for. Although Scott’s premise could contribute significantly to a structural understanding of economic growth, the causal relationship between human capital and economic growth [welfare] is not yet fully understood.
3. The general practice to normalize economic growth formulations to reflect parameters on a per capita basis thereby eliminating the explicit inclusion of labour in the production function .
4. The innovative gains from human ingenuity are implicitlyretained in other factors in our formulation.