Human Development and Economic Growth Through Education in Developing Regions

Abstract

Human development, a cornerstone of sustainable development, encompasses improvements in the quality of life for both present and future generations. Beyond addressing basic needs, it includes access to education, healthcare, security, and freedoms. This paper adopts a distinctive approach to examining the interplay between human development and economic growth in developing countries, with a particular emphasis on education as a pivotal driver. Using a theoretical overlapping generations model and an empirical analysis of African and Asian developing countries from 2000 to 2021, we employ the two-way panel estimation that captures within-country variations over time while isolating the effects of global shocks and unobserved heterogeneity. The findings reveal that education has a positive impact on economic growth in both areas, even when considered separately. These results align with the literature but also prompt discussions on prioritizing education quality over quantity, reducing inequalities, improving financing mechanisms, integrating technology, and aligning education systems with labor market demands to foster sustainable growth.