ASSESSMENT OF THE RELATIONSHIP BETWEEN EDUCATION, SKILLS AND SUSTAINABLE ECONOMIC DEVELOPMENT BASED ON PCA ANALYSIS

The purpose of this study is to assess the impact of employees' education and professional skills on economic growth in European countries. The paper analyses current trends to identify the most influential factors driving economic development of countries. The economy is increasingly analysed in terms of the roles of creativity, digitalisation and innovation. Methods for determining the value of human capital are summarised according to criteria such as investment, income, historical and expert assessments. Using principal component analysis (PCA), the study determines the rates of return on education for 20 European countries. Based on the available data, two main components are identified to assess the overall impact of these indicators on GDP per capita growth. These components make it possible to evaluate the contribution of education and employees' professional skills to the economic development of each country, particularly to GDP per capita growth. The k-means clustering method was applied to classify countries according to the degree to which the main components influence economic development, resulting in three clusters. The first cluster includes developed countries with a high level of innovation, the second – developed countries with a lower level of innovation and average returns to education, and the third – countries with predominantly non-innovative sectors. Regression models are subsequently built to analyse the impact of each component on GDP per capita growth and to determine the extent of that impact. Based on a comparison of the coefficients of the constructed regression models, it is concluded that the relationship between the level of education and economic growth in a number of European countries becomes more pronounced under the condition of the development of the innovative and technological components of the economy.