African youth and unemployment: does human capital investment still matter?

Graduate unemployment has become a common phenomenon in Africa. Many youth with advanced education levels are not able to find decent jobs. This article examines the effect of human capital investment on youth unemployment using panel data from 44 sub-Saharan countries over the period 1991-2020. The Cross-Sectional augmented Autoregressive Distributed Lag (CS-ARDL) modeling approach is carried out to overcome the issue of endogeneity and cross-sectional dependency. Results show that in the long run, an increase in primary and tertiary school enrolments reduces the youth unemployment rate. In contrast, secondary school enrolment is positively associated with youth unemployment, independently of gender considerations. The short-run dynamics reveal that primary and tertiary school enrolments are positively associated with youth unemployment. In addition, the results confirmed Phillip's curve hypothesis between inflation and unemployment and Okun's law between economic growth and unemployment.