Human capital development and economic sustainability linkage in Sub-Saharan African countries: Novel evidence from augmented mean group approach

Abstract

Sustainable Development Goal number four (SDG-4) strongly emphasizes quality education, which is crucial to human capital development. The importance of human capital development for sustainable economic development has thus risen to the top of the global policy agenda. However, the empirical literature on the topic has several limitations, including utilizing inappropriate measurement of human capital development and being unable to investigate the quality dimensions of education. Therefore, this study used years of schooling and return on education to fill the gap, and also considered the role of institutional and political factors in its empirical estimation. The main objective of this study is to investigate the effect of human capital development on economic sustainability in 30 Sub-Saharan African countries, employing panel data from 2000 to 2020. The augmented mean group model was used in the empirical investigation. The findings of the study showed that human capital development negatively and significantly affects economic sustainability in Sub-Saharan African countries. Thus, among the policy alternatives that Sub-Saharan African countries and policymakers should pursue to attain the goals of economic sustainability is revisiting the entire human capital development architecture and putting more of an emphasis on quality education than on access to education.