Human Capital and Economic Growth: Is Africa Different?

This paper investigates the difference in growth effects of human capital in African countries and the rest of the world. Using an expanded neoclassical growth model, panel data, a dynamic panel estimator and a broader definition of human capital including both health and education, we find that the effect of human capital on the growth rate of per capita GDP in Africa does not differ significantly from the growth impact of human capital in the rest of the world. Our results suggest that Africa does not grow any differently than the rest of the world. The observed growth differential between Africa and the rest of the world can be attributed to the fact that Africa has low endowments of growth-enhancing characteristics. Our results suggest that Africa should be treated like any other part of the world and that researchers and policy makers alike should forget about the "African difference," and formulate more efficient growth policies for Africa.