Human Capital and Inclusive Growth in Sub-Saharan Africa: The Case for Education
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Abstract
The inclusivity of economic growth is crucial for enhancing socio-economic well-being. Despite various policy initiatives aimed at improving human capital in Sub-Saharan Africa (SSA), growth remains non-inclusive. This study investigates the impact of human capital development, particularly in education, on inclusive growth, measured through the Inclusive Growth Index (IGI) and GDP per person employed (GDPPPE) in SSA. To achieve this objective, panel data from 20 SSA countries spanning from 2000 to 2021 were utilized, employing cross-section dependence tests and the Feasible Generalized Least Squares estimation method. Results indicate that indicators of human capital development, such as secondary school enrolment (SSE) and public expenditure on education (PEE), positively and significantly influence IGI. However, while SSE positively impacts GDPPPE, PEE exhibits a negative and significant effect when considering corruption and the rule of law. In conclusion, the study emphasizes that human capital development is key in driving inclusive growth in SSA. It suggests that policy efforts to foster inclusive growth should prioritize expanding access to secondary school education and substantially increasing government spending on education, while ensuring that the process is free from corruption.
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