Title: Human capital development and economic growth nexus in Sub-Saharan Africa countries using a novel panel data analysis

Authors: Wondesen Teshome Bekele; Fekadu Gelaw Mersha

Addresses: Department of Statistics, Dire Dawa University, Dire Dawa, Ethiopia ' Department of Agricultural Economic, Haramaya University, Dire Dawa, Ethiopia

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.

Keywords: economic growth; human capital development; HCD; panel data; dynamic common correlated effect; DCCE; Sub-Saharan Africa; SSA.

DOI: 10.1504/IJEPEE.2023.136303

International Journal of Economic Policy in Emerging Economies, 2023 Vol.18 No.3/4, pp.381 - 397

Received: 15 Nov 2019
Accepted: 17 Aug 2020
Published online: 30 Jan 2024 *

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