Human capital and economic growth : the Sudan case

Abstract EN

There can be no significant economic growth in any country without adequate human capital development.

In the past decades, much of the planning in Sudan was centered on the accumulation of the physical capital for rapid growth and development, without due recognition of the important role of the human capital in the development process.

The overall objective of the paper is to investigate the long, as well as the short-term impact, of human capital on the economic growth in Sudan during the period of 1970 to 2009.

The auto regressive distributed lag (ARDL) approach was used to ascertain this relationship.

The basic macroeconomic variables of concern derived from the literature review are: the real gross domestic product, the labor force, the real capital stock as well as the average years of schooling.

The results detect the existence of a long-run relationship among the variables when economic growth and human capital are considered as dependent variables.

Furthermore, the none-causality test suggests existence of two long-run causality relationships: (a) labor, capital and education to economic growth, and (b) labor, capital and growth to human capital.

The short-run causality test indicates the existence of two way relationship between economic growth and capital stock.