Abstract: Acknowledging that human capital stocks influence the economic growth of such a country, this thesis was conducted for studying the relationship between human capital and economic growth in Rwanda. Time series data used were the secondary data from the World Bank, development indicators open source. The Ordinal Least Square (OLS) regression was used for performing the analysis of those time series (1980-2019). Different tests used by econometricians for running a robust model were run, that is ADF for testing the stationarity of the series and the Johansen Cointegration test for identifying whether there is cointegration of vectors among endogenous variables and the existence of long-run equilibrium. The time series were stationary in the first difference, denoted by I(1) and two vectors are cointegrated which directed the researcher to run the VECM. The estimates of VECM showed that there is a 9.82% adjustment of shock from the short-run to the long-run equilibrium. All the human capital proxy variables were statistically significant, however, some variables indicated unexpected negative signs, which are suspected to be caused by a lack of data collection over time and human capital constraints such as unemployment, quality of education and health system challenges. Therefore, it is recommended to improve the quality of education, and health services and conduct further research using other proxy variables of human capital in Rwanda for comparison purposes.
Keywords: Human capital investment; economic growth; cointegration; time series.
Title: HUMAN CAPITAL INVESTMENT AND ECONOMIC GROWTH IN RWANDA
Author: RUDASINGWA Didace
International Journal of Thesis Projects and Dissertations (IJTPD)
Vol. 10, Issue 4, October 2022 - December 2022
Page No: 79-88
Research Publish Journals
Website: www.researchpublish.com
Published Date: 29-November-2022
