Endogenous growth model and the human capital development: Evidence from the West African Monetary Zone (WAMZ)

Abstract

Abstract. This study examined the effect of human capital development on economic growth in the context of West Africa Monetary Zone (WAMZ) countries for the period 2001 – 2019. The data for the study were sourced from World Development Indicators of the World Bank for the six (6) ECOWAS countries. The panel least squares (random effects and fixed effects modeling) were embraced as the estimation techniques. The empirical result of the study reveals a positive coefficient and statistically significant at 1% significance level in the fixed – effects model of the following macro economic variables government expenditure on education, Labour force and Population growth rate suggesting that they significantly stimulate economic growth in WAMZ countries. On the other hand government expenditure on health and investment income ratio had negative co-efficient with only investment income ratio statistically significant at 1% significance level. This indicates that urgent government action is required to reverse these negative trends in order to encourage health and investment contribution to economic growths in WAMZ countries. The study recommended among others that government of WAMZ countries should increase budget allocation to the education and health sectors for infrastructure and personnel development to foster a healthy work force that will promote economic growth.

Keywords. West Africa Monetary Zone; Secondary school enrolment; Government expenditure on education; Total labour force.

JEL. F43; J24; O11.