Human capital development and economic growth nexus in Sub-Saharan Africa countries using a novel panel data analysis
by Wondesen Teshome Bekele; Fekadu Gelaw Mersha
International Journal of Economic Policy in Emerging Economies (IJEPEE), Vol. 18, No. 3/4, 2023

Abstract: There has been increased recognition on the important role of human capital development for tackling the core welfare problems such as poverty, unemployment, and inequality. This motivated Sub-Saharan Africa (SSA) countries to aggressively expand of education over the past decades. This study examined the interdependence between human capital development and economic growth of 36 SSA countries using annual data from 1980 to 2017. A dynamic common correlated effects estimator that overcomes the econometric grumblers that are common in cross-country studies is used. The coefficients of lagged economic growth, capital stock and human capital in the economic growth model had a positive and statistically significant effect on economic growth, while the lagged economic growth in the growth rate model had a negative effect indicating conditional convergence. Moreover, human capital was found to enhance economic growth rate more than capital stock. Thus, the SSA countries should invest on human capital development by expanding education.

Online publication date: Tue, 30-Jan-2024

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