Effect of Human Capital Development on Economic Growth of Ecowas Member States
Advances in Sciences and Humanities
Volume 5, Issue 1, February 2019, Pages: 27-42
Received: Dec. 21, 2018; Accepted: Jan. 10, 2019; Published: Mar. 30, 2019
Views 233      Downloads 135
Authors
Fadila Kabir Usman, Department of Economic, Faculty of Social Sciences, Nigeria Defence Academy, Kaduna, Nigeria
Olure-Bank Adeyinka, Department of Economic, Faculty of Social Sciences, Nigeria Defence Academy, Kaduna, Nigeria
Article Tools
Follow on us
Abstract
This study examines the random effect of human capital development on economic growth of ECOWAS member states for the period of thirty seven years from 1980-2016, the measurement of random effect of human capital development on economic growth of ECOWAS member countries encompasses World Development Indicator and human capital index, four human capital variables are used, namely: expenditures on education (EED), expenditures on health (EHE), gross domestic product (GDP) and school enrollment (SCE), these variables were transformed to logarithm of base ten (10) to give more robust estimates,the economic growth was proxied by GDP, which is dependent variable, the empirical evidence is based on the Pedroni residual co-integration approach to test for the long-run relationship among the variables, the findings show that there is positive and significant relationship between GDP and government expenditure on education, expenditure on health and school enrollment in the ECOWAS counties, the study concludes that human capital development has an effect on economic growth in the ECOWAS region,the study is very relevant to the post-2015 Sustainable Development Goals agendas for two fundamental reasons: (a) Exclusive development is a critical policy syndrome in ECOWAS region where human capital development is a key to attain the SDGs extreme poverty target despite enjoying more than two decades of growth resurgence in some member states. (b) Growth in the region can primarily be driven by high human capital with the population of member countries expected to double in about 30 years, high investment on education and health for inclusive development is very welcome. This is essential because studies have shown that the increase in human capital development (resulting from increasing investment in education and health) would be enhances economic growth and development.
Keywords
Economic Growth, Economic Development, Education, Health, Human Capital, Government Spending, Institutions
To cite this article
Fadila Kabir Usman, Olure-Bank Adeyinka, Effect of Human Capital Development on Economic Growth of Ecowas Member States, Advances in Sciences and Humanities. Vol. 5, No. 1, 2019, pp. 27-42. doi: 10.11648/j.ash.20190501.14
Copyright
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
References
[1]
Adawo, M. A. (2011). Has education (human capital) contributed to the economic growth of Nigeria? Journal of Economics and International Finance, 3(1) 46-58.
[2]
Adelakun, O. J. (2011). Human capital development and economic growth in Nigeria, European Journal of Business and Management, 3(9):29-37.
[3]
Adeyemi, P. A., & Ogunsola, A. J, (2016). The impact of human capital development on economic growth in Nigeria: ARDL approach, IOSR Journal of Humanities and Social Science (IOSR-JHSS), 21(3) 01-07.
[4]
Afridi, A. H. (2016). Human capital and economic growth of Pakistan, Business & Economic Review, 8 (1) 77-86.
[5]
Afzal, M., Farooq, M. S., Ahmad, H. K., Begum, I., & Quddus, M. A, (2010). Relationship between school education and economic growth in Pakistan: ARDL bounds testing approach to cointegration, Pakistan Economic and Social Review, 48(1) 39-60.
[6]
Ajadi, O. T., & Adebakin, A.B, (2014). Human capital development as correlate of economic growth in Nigeria, The African Symposium, 134 (14) 1-2.
[7]
Akpolat, A. G. (2014). The long-term impact of human capital investment on GDP: a panel cointegrated regression analysis, Economics Research International, Article ID 646518, 10.
[8]
Ali, S., Farooq, F., & Chaudhry, I. S. (2012), Human capital formation and economic growth in Pakistan, Pakistan Journal of Social Sciences, 32(1): 229-240.
[9]
Amassoma, D., & Ikechukwu, .E. (2016). A Reappraisal of the Nexus between Investment in Human Capital Development and Economic Growth in Nigeria, Journal of Entrepreneurship, Business and Economics, 4(2):59–93.
[10]
Arabi, K. A. M., & Abdalla, S. Z. S, (2013). The impact of human capital on economic growth: empirical evidence from Sudan, Research in World Economy, 4(2).
[11]
Bakare, A. S., & Sanmi, E. D, (2011). The effect of health on economic growth: Theory and Evidence, NBER Working Paper Series, No 8587; available on http://www.nber.org/papers/w8587
[12]
Barro, R. J., (1991). Economic growth in a cross-section of countries. Quarterly Journal of Economics, 106 407-443.
[13]
Barro, R. J., & Lee, J. W., (1993), International comparison of educational attainment, Journal of Monetary Economics, 32(3) 363- 394.
[14]
Barro, R. J., (1990). Government spending in a simple model of endogenous growth, Journal of Political Economy, 98(5) 103 - 125.
[15]
Boachie, M. K., (2015). Effects of health on economic growth in Ghana: An application of ARDL bounds test to cointegration. MPRA Paper No. 67201, posted 21. October 2016 10:35 UTC.
[16]
Breitung, J., (2000). The local power of some unit root test for Panel data in Baltagi.
[17]
Dauda, R. O. S., (2010). Investment in education and economic growth in Nigeria: empirical evidence, International Research Journal of Finance and Economics, 24(55) 158-169.
[18]
Edrees, A., (2016). Human capital, infrastructure and economic growth in Arab world: a panel granger causality analysis, Business and Economics Journal, 7(1):201.
[19]
Eggoh, G., Houeninvo, H., & Sossou, G. (2015). Education, health and economic growth in African countries, Journal of Economic Development, 40 (1),
[20]
Ehimare, O. A., Ogaga-Oghene, J. O. O., Obarisiagbon, E. I., & Okorie, U. E. (2014). The Nigerian government expenditure on human capital development: An efficiency analysis, European Journal of Business and Social Sciences, 3(7) 01-13.
[21]
Emmanuel, O. N. B., Wujung, V. A., & Martin P., Emmanuel, S. M. P. (2014). Mechanisms of the influence of human capital on economic growth: a panel data analysis of the CEMAC region, Asian Economic and Financial Review, 4(5):625-640.
[22]
Frank, R. H., & Bernanke, B. S. (2007). Principles of Microeconomics (3rd ed.), New York: McGraw- Hill/Irwin.
[23]
Friedman, J. (1972). Growth centres in regional economic development.
[24]
Gebrehiwot, K. G. (2012). The impact of human capital development on economic growth in Ethiopia: Evidence from ARDL Approach to Co-Integration, International Journal of Humanities & Social Science, 2 (4).
[25]
Godstime, O. E., & Uchechi, S. A. (2014). Human capital development and economic growth: The Nigeria experience, International Journal of Academic Research in Business and Social Sciences, 4 (4).
[26]
Hadir, A., & Lahrech, A. (2015), Human capital development and economic growth in Morocco, International Journal of Education and Human Developments, 1 (1) 49.
[27]
Hanif N., & Arshed, N. (2016). Relationship between school education and economic growth: SAARC countries, International Journal of Economics and Financial. 6(1) 1 294-300.
[28]
Havi, E. D. K., Enu, P., Attah-Obeng, F. O. P., & Opoku, C. D. K. (2013). Macroeconomic determinants of economic growth in Ghana: Co integration approach, European Scientific Journal, 9 (19).
[29]
Inuwa, N. (2012). Health expenditure and economic growth Nexus: An ARDL approach for the case of Nigeria. www.transcampus.org/journals, www.ajol.info/journals/jorind.
[30]
Isola, W. A., & Alani R. A. (2012). Human capital development and economic growth: empirical evidence from Nigeria. Asian Economic and Financial Review, 2(7) 813-82.7
[31]
Jaiyeoba, S. V. (2015). Human capital investment and economic growth in Nigeria”, Africa research review, 9(1):30-46.
[32]
Jameel, S. & Naeem, M. Z. (2016). Impact of human capital on economic growth: A panel study, Bulletin of Business and Economics, 5(4):231-238.
[33]
Javed, M., Abbas, S., Fatima, A., Azeem, M. M. & Zafar, S. (2013). Impact of human capital development on economic growth of Pakistan: A public expenditure approach World Applied Sciences Journal 24 (3) 408-413.
[34]
Jelilov, G., Aleshinloye. M. F & Onder. S. (2016). Education as a key to economic growth and development in Nigeria; the international journal of social sciences and humanities invention, 3(02):1862-1868.
[35]
hingan, M. L. (2013). The economics of development planning, 38th edition. Delhi: Vrinda Publications (P) Ltd.
[36]
Kakar, Z. K., Khilji, B. A., & Jawad, M. (2011). Relationship between education and economic growth in Pakistan: A time series analysis. Journal of International Academic Research, 11(1):27-32.
[37]
Khan, J., Khattak N. U. R. & Khan, A. (2015). Human capital-economic growth nexus: A causality analysis for Pakistan, City University Research Journal 05 (2):07.
[38]
Khan, J & Khattak N. U. R (2013). The significance of research and development for economic growth: the case of Pakistan, City University Research Journal, 3 (2)
[39]
Khattak, N. U. R & Khan, J. (2012b). Does health accelerate economic growth in Pakistan? International Journal of Asian Social Science, 2 (4): 506-512.
[40]
Khattak, N. U. R & Khan, J. (2012a). The contribution of education to economic growth: evidence from Pakistan. International Journal of Business and Social Science, 3 (4):145-151.
[41]
Khembo, F. & Tchereni B.H.M. (2013). The impact of human capital on economic growth in the SADC Region, Developing Country Studies, Vol. 3, No.4: 144-152.
[42]
Kindleberger, C.P. (1965). Economic Development.
[43]
Kuznets, S. (1966.) Modern Economic Growth.
[44]
Lawanson A. O. (2015). Economic growth experience of West African region: does human capital matter? International Journal of Business and Social Science 6(12).
[45]
Lewis A 1956. Economic development with unlimited supplies of labour. Manchester School Studies, 22 139-191.
[46]
Lucas S. R. (1988). The mechanics of economic development‟ journal of monetary economics. 30-42.
[47]
Lyakurwa, W. M. (2007). Human capital and technology for development: Lessons for Africa. AFDB.
[48]
Mankiw N., Romer P. & Weil D. (1992). A contribution to the empirics of economic growth. A quarterly journal of economics .407-437.
[49]
Mehrara M. & Musai M. (2013), The relationship between economic growth and human capital in developing countries , International Letters of Social and Humanistic Science, 5:55-62.
[50]
Mat N.A, Mansur .K & Mahmud, R (2015). The relationship between human capital investment and economic development in Sabah. Malaysian, Journal of Business and Economics. 2(1):83 – 107.
[51]
Mekdad, Y, Dahmani, A & Louaj M. (2014), Public spending on education and economic growth in Algeria: causality test, International Journal of Business and Management. 2 (3): 55
[52]
Mei-ling, S (2014) Empirical analysis on the relationship between human capital investment and economic growth in rural areas: Based on the data of Henan. Journal of Chemical and Pharmaceutical Research, 6(3) 378-382.
[53]
Michael A. & Oderinde O. (2012). Public education expenditure and defence spending in Nigeria: An empirical investigation. An implication of vector auto regression (VAR) models, powered by mooreadvice, 2012.
[54]
Muhammed A., Bilah M. & Muhammed S. (2012). Impact of human capital on economic growth with emphasis on intermediary role of technology: Time series evidence from Pakistan. Africa Journal of Business Management, 6: 280-285.
[55]
Mulligan, C., & Sala-i-Martin, X. (1995). Measuring aggregate human capital. NBER Working Paper no. 5016. Combridge, MA: National Bureau of Economic Research.
[56]
Ndambiri, H. K., Ritho C., Ng’ang’a .S. I., Kubowon, P. C., Mairura F.C., Nyangweso P.M., Muiruri E. M. & Cherotwo F. H.(2012) Determinants of economic growth in sub-saharan Africa: A panel data approach, International Journal of Economics and Management Sciences, 2(2):18-24.
[57]
Nehru, V., Swanson, E., & Dubey, A. (1993). A new database on human capital stock sources, methodology, and result. Working Paper No. 1124, Washington DC: World Bank.
[58]
Nelson, R, & Pack H (1999). The Asian miracle and modern growth theory, Economic Journal, 109 (457):416.
[59]
Nelson, R, & Phelps, E. (1966). Investment in humans, technological diffusion, and economic growth” American Economic Review, 61: 69-75.
[60]
Novignon, J., Nonvignon, J., & Arthur, E. (2015). Health status and labour force participation in Sub‐Saharan Africa: a dynamic panel data analysis. African Development Review, 27(1), 14-26.
[61]
Nurudeen, A. & Usman, A. (2010). Government expenditure and economic growth in Nigeria, 1970-2008: A disaggregated analysis. Business and Economic Journal, 6(20):23-40.
[62]
Obialor M. C (2017). The effect of government human capital investment on the economic growth of Sub-Sahara African (SSA) countries evidence from Nigeria, South Africa and Ghana (1980 to 2013). International Journal of Asian Social Science, 2017, 7(4): 328-339.
[63]
Odit M. P, Dookhan M. K & Fauzel M. S, (2010). The impact of education on economic growth: the case of Mauritius. International Business & Economics Research Journal 9 (8):141-156.
[64]
Oisaozoje I. A, & Isaac O. M (2016). Impact of human capital development on economic growth in Nigeria. International Journal of Business and Management Invention, 5(3): 62-68.
[65]
Oluwatobi, S. O, & Ogunrinola, I. O. (2011) Government expenditure on human capital development: Implications for economic growth in Nigeria. Journal of Sustainable Development. 4(3).
[66]
Omotayo O. A. (2015). Impact of human capital development on economic growth in Nigeria. International Journal of Recent Research in Commerce Economics and Management (IJRRCEM) 2(2):151-164.
[67]
Owusu-Nantwi, V. (2015). Education expenditures and economic growth: evidence from Ghana. Journal of Economics and Sustainable Development. 6(16): 69.
[68]
Pedroni, .P (2000). Fully modified OLS for heterogeneous cointegrated panel, Advances in Econometrics, 15: 93–130.
[69]
Phillips, P., & Hansen, B. (1990). Statistical inference in instrumental variables regression with I (1) Processes. Review of Economic Studies, 57:99–125.
[70]
Psacharopoulos, G., & Arriagada, A. M. (1986). The educational attainment of the labor force: an international comparison. International Labor Review, CXXV: 32-52.
[71]
Rastogi, P.N., (2002). Knowledge management and intellectual capital as a paradigm of value creation. Human systems Management, 21(4):229-240.
[72]
Risikat O. S. D. (2010). Investment in education and economic growth in Nigeria: an empirical evidence, International Research Journal of Finance and Economics.
[73]
Rodriguez, P. J., & Loomis, R. S. (2007). A new view of institutions, human capital, and market standardization education, knowledge & economy, 1(1): 93–105.
[74]
Romele, L. (2013). Human capital development and economic growth in Latvia, European Scientific Journal, 9 (31).
[75]
Romer, P. M, (1986). Increasing returns and long run growth”, Journal of Political Economy, 94, 1002-37.
[76]
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), 71–102.
[77]
Rosen, H. S. (1999). Public Finance. New York: McGraw-Hill.
[78]
Saad, W. & Kalakech, K. (2009). The nature of government expenditure and its impact onSustainable economic growth” Middle Eastern Finance & Economics, Issue 4 (2009), Euro Journals Publishing, Inc. 2009: 38-47.
[79]
Samar B & Waqas M (2014), Human capital formation and economic growth in Pakistan, World Applied Sciences Journal 32 (4): 635-641.
[80]
Schultz T. P. (1992).The role of education and human capital on economic development. An empirical assessment center discussion paper, economic growth center, Yale University.
[81]
Sesay .A & Omotosho .M (2011) The politics of regional integration in West Africa, WACSERIES 2(2).
[82]
Sghari, M. B. A., & Hammami, S. (2013). Relationship between health expenditure and GDP in developed countries. IOSR Journal of Pharmacy, 3(4): 41-45.
[83]
Shaari, M.S (2014) Education-led Economic Growth in Malaysia, Sop Transactions on Economic Research. 1(1)
[84]
Shahzad, F. (2015). Role of human capital on economic growth: A case study of Pakistan International Journal of Accounting and Economics Studies, 3 (1) 20-24.
[85]
Shahzad, F. (2015), Role of human capital on economic growth: A case study of Pakistan, International Journal of Accounting and Economics Studies, 3 (1), 20-24.
[86]
Shah, S.W.A, Shahzad, S K, & Haq, M.A (2015), Human capital and economic growth: evidence from selected asian countries, Journal of Resources Development and Management. An International 11(22).
[87]
Theodore R. B, (2012) The role of education in economic development: Theory, History, and Current Returns.
[88]
Todaro, M. P. & Stephen, C. S. (1982). Economic for developing countries. Longman publishers. London.
[89]
Todaro, P. (2007). Economic development: Pearson Education, 8th Edition, India.
[90]
Torruam, J. T & Abur, C. C. (2014) Public expenditure on human capital development as a strategy for economic growth in Nigeria: application of co integration and causality test analysis, International Journal of Research in Humanities and Social Studies, 1(2): 14-23.
[91]
Umaru, A. (2011). Human capital: education and health in economic growth and development of the Nigerian. British journal of economics, Finance and Management Sciences, 2(1): 22-36.
[92]
UN (1997), Glossary of environment statistics. Studies in methods, Series F, No. 67, United Nations, New York.
[93]
UNDP (1996): Human development report New York Oxford University press.
[94]
UNDP. (2011). Human development report: sustainability and equity: a better future for all. the united nations development programme, UN Plaza, New York, USA.
[95]
UNESCO, 2005, World report: towards knowledge societies, UNESCO Publishing.
[96]
UNESCO. (2010). UNESCO Institute for statistics data base, Available at www.uis.unesco.org (accessed on November (22).
[97]
WDE. (2010). World data on education.7th Edition, UNESCO-IBE.
[98]
World Health Organisation (1946). Publications on health.
[99]
World Bank (2017). World Development Indicator 2017 on CD-ROM World Bank Washington DC.
[100]
Zivengwa,T, Hazvina. F, Ndedzu, & Mavesere I, M (2013). Investigating the causal relationship between education and economic growth in Zimbabwe, Asian Journal of Humanities and Social Studies. 1 (5): 399.
ADDRESS
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
U.S.A.
Tel: (001)347-983-5186