This paper examines the determinants of human capital development in the SAARC region. This study adopts a modified version of Sen’s (1999) capability approach to resolving the inherent problems of endogeneity and persistence in economic data. This study uses second-generation cross-sectional dependence, slope heterogeneity, and unit root tests. Westerlund’s cointegration test is used to check the cointegration among variables. This study uses the CS-ARDL approach to calculate the long-run estimates. It deals with endogeneity problems and a small-sample bias effectively. The results indicate a positive effect of GDP, labor force participation rate, infrastructure, public health expenditures, public education expenditures, and institutional quality on human capital development in the SAARC region.