Economic development is the result of hard work, discipline and frugality – qualities, which can be learned through an education process. This is the gist of Max Weber's writings on the development of capitalism, which I have modeled in this paper. The model shows how an educational sector that produces a composite of work ethics and skills can lead to sustained growth. Human capital in this model reduces the disutility of effort exertion and thereby induces people to work harder. Along balanced growth path, effort exertion is constant in this mode. The model shows that growth is an increasing function of effort exertion which itself is a function of a number of efficiency parameters. Historical anecdotal evidence and a regression analysis looking at the effects of formal education on growth with a new interpretation are presented in support of the model.
