International Conference on Rural Development and Enterpreneurship 2019 : Enhancing Small Busniness and Rural Development Toward Industrial Revolution 4.0 Vol. 5 No. 1 ISBN: 978-623-7144-28-1 518 The Effect of Human Capital and Human Capital Spillover on Economic Growth Sodik Dwi Purnomo 1 , Istiqomah 2 , Suharno 3 1 Master Student, Master of Economics, Faculty of Economics and Business, Universitas Jenderal Soedirman 2,3 Economics and Development Studies, Faculty of Economics and Business, Universitas Jenderal Soedirman Abstract. The economic growth of DKI Jakarta Province is the highest among provinces on Java. Economic growth is among others, determined by the quality of human resources and supply of labor. Workers include those originate in the region itself or migrate from other regions. This study aims to analyze the effect of average years of schooling, life expectancy, number of workforce, and number of in-migrants on the economic growth of DKI Jakarta Province. Time series data during 2000-2018 were analyzed using multiple linear regression with Ordinary Least Squares (OLS) model. The results showed that the independent variables have positive significant effect on the economic growth. This finding implies the importance of improving the quality of human resources including education and health, and the need for policy improvement regarding in-migration, in term that not all people from various educational backgrounds move to the DKI Jakarta Province, so as to promote economic growth. Keywords: 1 Economic Growth  2 Human Capital  3 Human Capital Spillovers 1. INTRODUCTION Human capital has an important role in economic development.Unlike physical capital, human capital tends to have accumulative and long-term effects. The accumulation of human capital is expected to become an initial source of sustainable development. According to Solow (1956) the reciprocal relationship between economic growth and the growth of human capital may be an important key to sustainable economic growth, in the sense that development does not only contribute to one aspect, namely economic growth but is able to improve people's welfare and to reduce unemployment and poverty. Acemoglu & Autor (2011) define human capital as individual’s knowledge, information, ideas, expertise, and health that will influence productivity. The development of ideas about the contribution of human capital is explained by Romer (1990), Lucas (1988), and Cohen & Soto (2007) who explain that the better human capital will have an impact on sustainable economic growth. The contribution of human capital can be analyzed from two micro as well as macro perspectives. Micro perspective views that human capital is part of individuals’ production function which is then related to the quality of human resources. On the one hand, knowledge can have an impact on the mastery of technology and the innovations carried out in terms of the production process which leads to higher efficiency. On the other hand the expertise will make individuals become more competent in the production process, thus encouraging productivity (Xiao and Song, 2013). From macro perspective, the contribution of human capital can be analyzed from a micro contribution that is aggregated into national economic development. The development has resulted from an increase in welfare which is indicated by an increase in the level of per capita Gross Regional Domestic Product (GRDP). The higher economic growth achieved by a region indicates the better economic activity is obtained from the growth rate of Gross Domestic Product (GDP) on the basis of constant prices (Todaro and Smith, 2011). According to Lucas (1988) human capital has internal as well as external productivity effects. The increase in individual