Education has often been viewed as a key factor in promoting economic growth and reducing poverty. But some factors like inequalities in education may prevent developing and less developed countries from fully harnessing the benefits of education. This may further exacerbate economic, social, and cultural disparities among countries. Given this backdrop, the relationship between educational inequalities and economic growth seems to be important. Hence, the authors aim to delve into the role of educational inequalities in economic growth for Sub-Saharan African countries over the 2010-2021 period through causality analysis. These findings demonstrate a bidirectional causality between educational inequality and economic growth in 34 SSA during the assessed period. This suggests that changes in educational inequality influence economic growth and vice versa. The findings of this study can provide policymakers with insights into implementing educational policies that foster economic growth and reduce inequality in Sub-Saharan African countries.
TopIntroduction
Economic growth is a crucial concept for countries' development, the creation of medium- and long-term plans, the implementation of national economic programs, and the well-being of the population. Academics have engaged in extensive debates concerning the notion of economic growth and the various factors that influence it over the years.
During the early periods of growth theories, technology occupied a significant role in growth models. Early studies by Solow (1956) and later works by his successors (Barro, 1991; Mankiw et al., 1992) assumed technology as an exogenous factor, playing a vital role in explaining economic growth. However, subsequent research incorporated technology as an endogenous variable in their models (Romer, 1990) and focused on examining the relationship between technological development and human capital (Lucas, 1988). According to Barro (2001), endogenous growth models made significant advancement by offering a more comprehensive analysis of the factors driving economic growth in the late 1980s. Notably, those models well emphasized the role of research and the innovation process, which led to substantial contributions in technological advancement. As a result of this, these models played a pivotal role in promoting better production processes and improved techniques, thereby driving economic growth forward.
Following these intellectual debates regarding growth models, endogenous growth models have closely examined the relationship between economic growth and human capital. In fact, the Human Capital Theory (HCT), which was established by Schultz (1963) and Becker (1975), laid the foundations for these endogenous growth models in analyzing the nexus between human capital and economic growth. Despite human capital is composed of many factors such as health, social capital, and education, it is noteworthy that education emerges as a foremost determinant of human capital. In line with this, the HCT claims that education plays a significant role in the development of human productivity. Agasisti and Bertoletti (2022) underline the fact that education has an important place in economic development both regionally and nationally. Considering all these aspects, the relationship between education and economic growth appears to be theoretically evident.
Although there are numerous studies in the existing literature analyzing the direct relationship between education and economic growth, various approaches have also been taken to examining the association between education and economic growth from different point of views. For instance, the impact of gender inequality in education (Klasen 2002; Chaudhry, 2007; Cuberes & Teignier, 2014), the effect of higher education (Gyimah-Brempong et al., 2006; Valero & Van Reenen, 2019; Agasisti & Bertoletti, 2022), as well as the influence of education quality (Hanushek & Wößmann, 2007; Hanushek & Woessmann, 2010; Castelló-Climent & Hidalgo-Cabrillana, 2012) have been extensively discussed in relation to economic growth. However, few studies analyzed the relationship between educational inequality and economic growth, especially for Sub-Saharan African (SSA) countries. Educational inequality seems to be an important factor of economic growth and development because the unequal distribution of educational opportunities leads to a decrease in the positive spillover effects and technological externalities that education can generate (Sauer & Zagler, 2014). Moreover, studies demonstrate that the unequal distribution of education may impede economic growth and contribute to poverty by causing a disruption in income distribution (Glomm & Ravikumar, 1992). Hence, examining the dynamics between educational inequality and economic growth seems to be important in the development of less developed countries, such as Sub-Saharan African nations.