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Government expenditure on human capital and growth in Namibia: a time series analysis

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  • Christopher P. P. Shafuda

    (University of Namibia Rundu
    North-Eastern Hill University Shillong)

  • Utpal Kumar De

    (North-Eastern Hill University Shillong)

Abstract

An attempt is made in this paper to examine the impacts of government spending on human capital on human development indicators like healthcare outcomes, education achievements and increase in national income in Namibia using time series data from 1980 to 2015. The analysis reveals a significant long-run inverse relationship of government spending on healthcare with fertility rate, infant mortality rate and under-5 mortality rate. However, no co-integration is observed between government spending on healthcare and life-expectancy or adult mortality rate. Also, the findings reveal a significant long-run positive relationship of government spending on education with literacy rate, net primary and gross tertiary enrolment rate. Whereas, no co-integration between government spending on education and gross enrolment rate at primary and secondary level is observed. The vector auto-regression analysis revealed significant impacts of expenditure on healthcare and education on the GDP growth in the long run through improved human resources. The results are thus in favour of continuation of expansionary government expenditure policy to achieve faster economic growth in Namibia. However, drastic changes should be adopted to improve basic education and primary healthcare in the country.

Suggested Citation

  • Christopher P. P. Shafuda & Utpal Kumar De, 2020. "Government expenditure on human capital and growth in Namibia: a time series analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-14, December.
    • Handle: RePEc:spr:jecstr:v:9:y:2020:i:1:d:10.1186_s40008-020-00196-3
    DOI: 10.1186/s40008-020-00196-3
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    More about this item

    Keywords

    Fiscal policy; Human capital; Healthcare and education expenditure; Development; Co-integration; Error correction model; Namibia;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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