Modelling the Comparative Effects of Health and Education on Growth: A Fixed Effects (FE) Model

Abstract

This paper analysed the comparative impacts of health and education on growth in Southern African region using a set of cross country panel data from 11 countries during the sample period 2005 – 2011.  The econometric procedure used in the study employed the Breusch and Pagan Lagrangian Multiplier test and Hausman test techniques. Based on the Fixed Effects (FE) model, results show that health and education have statistically significant and positive effects on economic growth; with health having a more remarkable effect on economic growth. The R-squared statistic indicates that nearly 22.84 percent total variation in economic growth was accounted for by health and education during the period under review. The F(2,65) statistic (=16.45; p < 0.05) reveals significance of the model; while the interclass correlation value shows that nearly 99.53 percent of the variance was due to differences across panels.

Keywords: growth, health, education, panel data, Fixed Effects Model