Does Human Capital Tilt the Population-Economic Growth Dynamics? Evidence from Middle East and North African Countries

Various studies have investigated the population-growth dynamics and the human capital-growth dynamics without assessing the human capital-population-growth dynamics in a single context. This study fills the lacuna in the literature by interrogating if human capital tilts the population-economic growth dynamics in MENA countries. It provokes a new perspective and highlights findings on whether human capital is relevant in influencing the impact of population on economic growth? This empirical investigation uses two indicators of human capital: education enrolment and life expectancy at birth on an unbalanced panel data of 19 MENA countries from 1980 to 2020. The novel methodology of feasible generalized least squares and panel-corrected standard errors technique addressed our three objectives and we find that: (i) population growth and human capital indicators individually influence economic growth positively; (ii) the interaction effect is mixed; and (ii) the net effect of population growth on economic growth when human capital is accounted for is mostly positive. Further examination of the results reveal that primary education exerts the most impact among the education indicators while life expectancy is the most potent human capital indicator. These outcomes highlights the relevance of both measures of human capital and supports the discourse that neither education nor health is a perfect substitute for the other as a measure of human capital. Policy recommendations are discussed.

Automated summary

This study fills the gap in the literature by investigating the impact of human capital on the population-economic growth dynamics in MENA countries. The findings suggest that both population growth and human capital indicators have a positive influence on economic growth, and the net effect of population growth on economic growth is mostly positive when human capital is taken into account.