Acta Universitatis Danubius. Œconomica, Vol 15, No 1 (2019)

Abstract

The paper investigates the contribution of Human capital to productivity in SSA countries. Human capital in this paper was viewed concurrently from the perspective of enrolment and graduates of higher education. While adopts panel data of 30 countries for 1980 to 2015 to estimate the paper’s models, a systematic procedure involving fixed effect Least Square Dummy Variable (LSDV) and system Generalized Methods of Moments (GMM) were used to test the hypothesis in this paper. Findings from this paper indicates that the impacts of higher education (both HEE and HEG) on TFP appear mixed. Higher education human capital proxied by enrollment and graduates consistently shows negative and positive signs in both methods of estimation. The human capital effects on TFP among the SSA countries flow from positive to negative as the regression moves from HEE to HEG. Quality HEG is recommended so that innovation and skills acquisition add value to SSA higher education. We can also conclude that the level of investment in SSA higher education is grossly inadequate. This implies that these countries’ higher education sectors suffer from inadequate human capital.