Does female human capital contribute to economic growth in India?: an empirical investigation

Abstract

Purpose

The purpose of this paper is to examine the impact of female human capital on economic growth in the Indian economy during 1970-2014.

Design/methodology/approach

The paper employs Ng-Perron unit root test to check the order of integration of the variables. The study also used ARDL-bounds testing approach and the unrestricted error-correction model to investigate co-integration in the long run and short run; Granger’s causality test to investigate the direction of the causality; and variance decomposition test to capture the influence of each variable on economic growth.

Findings

The study constructed a composite index for both male and female human capitals by taking education and health as a proxy for human capital. The empirical findings reveal that female human capital is significant and positively related to economic growth in both short run and long run, while male human capital is positive but insignificant to the economic growth; same is the case for physical capital, it implies that such investment regarding female human capital needs to be reinforced. Further, there is an evidence of a long-run causal relationship from female human capital, male human capital and physical capital to economic growth variable. The results of variance decomposition show the importance of the female human capital variable is increasing over the time and it exerts the largest influence in change in economic growth.

Research limitations/implications

The empirical findings suggest that the Indian economy has to pay attention equally on the development of female human capital for short-run as well as long-run growth of the economy. This implies that the policy makers should divert more expenditure for developing support for female education and health.

Originality/value

To the best of authors’ knowledge, this is the first attempt to study the relationship between female human capital and economic growth in the context of the Indian economy.

Citation

Sehrawat, M. and Giri, A.K. (2017), "Does female human capital contribute to economic growth in India?: an empirical investigation", International Journal of Social Economics, Vol. 44 No. 11, pp. 1506-1521. https://doi.org/10.1108/IJSE-10-2015-0272