Nexus Among Human Capital, Public Expenses and Economic Growth: Empirical Evidence from Developing World

Public spending and human capital are always focused on appropriate economic growth via a variety of short and long term methods. In this study, government spending, human capital, and economic growth in 31 developing countries are examined from 1986 to 2017. The long-term connections between public spending, human capital, and economic growth are examined in this study. To do this, the research estimates an empirical model that considers human capital, public investment, and the combined impact of these variables on economic growth. For the unit root, econometric procedures such as the ADF test were employed. Comparably, co-integration has been measured using the Pedroni, Johansen Fisher, and Kao tests. For long-run analysis, the FMOLS and DOLS estimators are employed. In the empirical models, labor force, capital formation, public spending, and human capital are independent variables. Long-run results indicate that labor force, capital formation, public spending, and human capital positively affects economic growth. Significant empirical connection among economic growth, public spending, and human capital is quantified in this study. The results of this evaluation, which took place in 31 developing nations between 1986 and 2017, have a big impact on human capital accumulation and fiscal policy. Regardless of whether the model is estimated using weighted or pooled DOLS estimators or weighted or pooled FMOLS estimators, this relationship is robust from the estimation approach.