Human Capital and Economic Growth in Sub-Saharan African Countries: A Panel Data Analysis
DOI:
https://doi.org/10.33095/kdgw1963Abstract
Purpose: This study examined the empirical relationship between human capital and economic growth across eight Sub-Saharan African (SSA) countries from 1990 to 2022.
Theoretical Framework: This study examined the relationship between human capital and economic growth by applying the Cobb-Douglas production function within the framework of the neoclassical Solow growth model. The study considers fixed assets as a measure of physical capital and school enrollment as a proxy for human capital.
Design/Methodology/Approach: This study employed the pooled mean group (PMG) estimator within a panel autoregressive distributed lag (ARDL) approach to analyze human capital variables' short- and long-run impacts on economic growth in SSA countries.
Findings: The findings provided strong empirical evidence of significant short- and long-term relationships between the variables. The long-run analysis demonstrates that human capital positively influences economic growth. Additionally, in the short-run, fixed assets, human capital, and labor were found to positively and significantly impact economic growth.
Research Implications: This study emphasizes the importance of focusing on education and skill training sectors to enhance human capital development in emerging African countries.
Originality/Value: This study demonstrates that human capital variables positively impact economic growth in SSA countries in both the short- and long-run. Consequently, this study underscores the role of human capital as a critical and influential factor in promoting economic growth in emerging SSA countries. It also contributes valuable insights for policymakers and adds to the existing literature in this area.
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