The impact of human capital investment on economic growth: A panel data analysis of MENA countries

Abstract

The human capital theory explains economic growth through the accumulation of knowledge among individuals. This study focuses on the effect of human capital on economic growth in the Middle East and North Africa (MENA) region. It applies the total production function, which includes traditional growth factors such as labor and physical capital, along with health and education indicators that represent human capital based on modern growth theories. Using panel data from 2004 to 2020, the study empirically examines how education and health, as measures of human capital, affect economic growth in MENA countries. The main finding is that human capital has a slightly positive effect on economic growth in the region, mainly due to inefficiencies in its use.