9 May 2024 | Muhammad Umair, Waqar Ahmad, Babar Hussain, Costinela Fortea, Monica Laura Zlati and Valentin Marian Antohi
The article explores the impact of labor force participation (LF) on economic growth (EG) in Pakistan, emphasizing the role of health and education expenditures. Using time series data from 1980 to 2022, the study applies ARDL, ECM, and Granger causality techniques. Results show that LF significantly boosts EG in both the short and long run, with better health and education facilities enhancing this effect. Health plays a more critical role in the short run, while education's impact is stronger in the long run. Granger causality results indicate that LF, health, and education significantly contribute to EG. The study highlights the importance of investing in health and education to empower individuals and drive economic growth. It also finds that the interaction between LF and health, as well as LF and education, has a positive effect on EG. Long-run estimates show that education has a more substantial impact on EG than health. Short-run analysis reveals that health expenditures have a more immediate effect on economic growth. The study concludes that prioritizing investments in health and education is crucial for sustainable economic growth in Pakistan.The article explores the impact of labor force participation (LF) on economic growth (EG) in Pakistan, emphasizing the role of health and education expenditures. Using time series data from 1980 to 2022, the study applies ARDL, ECM, and Granger causality techniques. Results show that LF significantly boosts EG in both the short and long run, with better health and education facilities enhancing this effect. Health plays a more critical role in the short run, while education's impact is stronger in the long run. Granger causality results indicate that LF, health, and education significantly contribute to EG. The study highlights the importance of investing in health and education to empower individuals and drive economic growth. It also finds that the interaction between LF and health, as well as LF and education, has a positive effect on EG. Long-run estimates show that education has a more substantial impact on EG than health. Short-run analysis reveals that health expenditures have a more immediate effect on economic growth. The study concludes that prioritizing investments in health and education is crucial for sustainable economic growth in Pakistan.