The Effect of Human Capital on Economic Growth in Ethiopia Using Econometric Analysis, Var

Zerihun Sisay

dc.contributor.author	Zerihun Sisay
dc.date.accessioned	2020-10-19T08:42:20Z
dc.date.available	2020-10-19T08:42:20Z
dc.date.issued	2020-10
dc.identifier.uri	http://hdl.handle.net/123456789/11424
dc.description.abstract	The main objective of the study is to investigate the long run and short run effect of human capital on economic growth in Ethiopia (using educational expenditure, health expenditure, territory school enrollment, secondary school enrollment, primary school enrollment, and official development assistance as proxy of human capital and real GDP as proxy of economic growth) over the period 1980-2015. This study had employed Johansen Co-integration, vector error correction model with variance decomposition and impulse response analyses to provide robust short run and long run effects of human capital on economic growth. The results show that the human capital components namely secondary school enrollment and territory school enrolment exhibit positive and statistically significant effect on economic in the long run. However primary school enrollment, health expenditure, official development assistance exhibit a negative and statistically significant effect on economic growth of Ethiopia in the long run. Educational expenditure has a negative and statistically insignificant effect on long run economic growth of Ethiopia. In the short run, the coefficient of error correction term is -0.485 suggesting about 48.5 percent of the variation in the RGDP is corrected within a year from its equilibrium level. The regression result shows primary school enrollment and official development assistance were the variables significantly affecting the RGDP in the short run positively. Moreover, the variance decomposition and impulse response analysis confirms a better picture of the short run dynamics. The analysis provided that the shocks to primary school enrollment and official development assistance have positive significant effects on RGDP in the short run. Hence, economic growth to be sustained, government should give more emphasis on primary, secondary, and territory school enrollment, while according on the findings, reducing the budget of health expenditure and transfer to highly productive sectors, encourage better investment in health by the private sector and effective use of official development assistance lead to higher productivity in human capital and hence higher economic growth.	en_US
dc.language.iso	en	en_US
dc.subject	ECONOMICS	en_US
dc.title	The Effect of Human Capital on Economic Growth in Ethiopia Using Econometric Analysis, Var	en_US
dc.type	Thesis	en_US