Does energy consumption improve human capital development? Empirical evidence from panel non‐linear autoregressive distributed lag in Africa

Abstract

The contributions of human capital to improvement in socio‐economic outcomes have generated significant interest in its determinants. On one hand, there is the orthodox view which states that energy consumption does not promote human capital development. In contrast, the heterodoxies argue that energy consumption is an essential driver of human capital development. Thus, we explore the asymmetric effects of energy consumption on human capital development for 22 African countries from 2000 to 2018 within the framework of panel non‐linear ARDL (NARDL). The long‐run results indicate that energy consumption is vital for human capital development. Specifically, in the long‐run, positive and negative shocks to energy consumption significantly improve human development. In addition, we find that economic growth, government effectiveness and foreign direct investment improve human capital only in the long‐run, while carbon dioxide emission retards it in both the long‐ and short‐runs. We found similar results for oil and non‐oil producing countries, ECOWAS, SADC, CEN‐SAD and COMESA countries.