Human Capital Formation and Economic Growth in Sub-Saharan African Countries: An Empirical Investigation

Abstract

This study explored human capital–economic growth nexus and determine if the relationship is influenced by the level of economic development in 36 sub-Saharan African countries during the period from 1986–2018. The study used dynamic generalised method of moments (GMM) and static estimations to achieve the objective of the study. The study used alternative indicators of human capital to provide strong evidence and robust results. The study also considered the income groups within the region. The study found that human capital contributed to economic growth, as its indicators are positive and significant. The study also found that the connection that exists between human capital and economic growth also depends on the level of economic development. Generally, our finding emphasised that both education and health measures of human capital are important, and that policymakers must consider the level of economic development while formulating policies that can enhance the impact of human capital on economic growth in the Sub-Saharan Africa region.

Early human capital: the driving force to economic growth in island economies

“…It prepares future labour force to generate higher productivity, greater innovation and technological progress that contribute to economic growth (Delalibera and Ferreira, 2019). The results are in line with other studies on Africa namely Ogundari and Awokuse (2018) and Akinlo and Oyeleke (2020).…”

“…They find positive effects of health and education on economic growth although the growth contribution of health is relatively higher than that of education. Similarly, across a sample of 36 Sub Saharan countries from 1986 to 2018, Akinlo and Oyeleke (2020) use the dynamic GMM to show a strong positive link between human capital measured by education and health indicators and economic growth. This association is dependent on the countries' level of economic development.…”

“…There was only a positive effect of the interactive term between urbanisation and human capital on economic growth. In contrast, Akinlo and Oyeleke (2020) use health and education measures and provide strong positive evidence of the effects of human capital on economic growth for Sub Saharan Africa. Another study by Korikiye and Niyekpemi (2021) shows a positive and significant relationship between government expenditure on education and Nigeria's growth while government expenditure on health was statistically insignificant.…”

Human Capital Development and Labour Market Outcomes in Africa: Evidence from Sub-Saharan African Countries

“…All of these are necessary among other things to produce adequate and quality goods and services (Campbell and Agbiokoro, 2014). While a plethora of studies exist on human capital development and economic growth at country and regional levels (Akinlo and Oyeleke, 2020;Karambakuwa et al, 2019;Rangongo and Ngakwe, 2019; Ogundare and Awokuse, 2018) amongst others, very few studies have examined the effect of human capital development on labour market outcomes. The few identified studies have employed different indicators in their measure of labour productivity.…”

Quality education: The nexus between human capital development, economic growth and social justice in the South African context

“…Sen (1990) further argued that a space where it is impossible to improve the wellness of the ones deprived of substantive freedom without the possibility of decreasing the utility of those who have accumulated more might arise. Akinlo and Oyeleke (2020) found that the relationship between human capital and economic growth human capital enables and equips individuals with skills on which the level of economic growth of the country depends. This indicates to the snowball effect that economic growth determines the standard of living of citizens in a nation.…”