The impact of human capital investment on economic growth in the MENA countries, using the dynamic panel data estimated by GMM method

In recent decades, the importance and the role of human capital in economic growth have been more considered by economists, so that one of the vital factors for economic growth and development is human capital. The aim of this study was to investigate simultaneously the impact of two human capital proxies which included public spending on education and government's health expenditure in 10 selected Middle East and North Africa (MENA) countries using GMM method in 2003-11. The results of GMM estimator for panel dynamic data model indicated that besides physical capital and labor factors, human capital variable also plays an important role in production function of MENA countries. So that 1% increases in government' health expenditure and public spending on education has led to 0.68 and 0.05 percent increase in economic growth, respectively. Also, in this estimation adjustment rate of economic growth is equal to 0.59. That is, 59 percent of the gap between actual value and desired value of economic growth is eliminated per year.