9 May 2024 | Muhammad Umair, Waqar Ahmad, Babar Hussain, Costinela Fortea, Monica Laura Zlati, Valentin Marian Antohi
This study 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 authors employ ARDL, ECM, and Granger causality techniques to analyze the relationship between these variables. The findings indicate that LF significantly boosts EG in both the short and long runs, with better health and education facilities strengthening this positive effect. Health plays a more crucial role in the short run, while education's impact is more substantial in the long run. The Granger causality results confirm that LF, health, and education significantly contribute to EG. The study recommends that the government prioritize investments in health and education to empower individuals to actively participate in economic activities, thereby contributing to overall economic output. The research underscores the importance of human capital development, particularly in labor-surplus countries like Pakistan, to drive sustainable economic growth.This study 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 authors employ ARDL, ECM, and Granger causality techniques to analyze the relationship between these variables. The findings indicate that LF significantly boosts EG in both the short and long runs, with better health and education facilities strengthening this positive effect. Health plays a more crucial role in the short run, while education's impact is more substantial in the long run. The Granger causality results confirm that LF, health, and education significantly contribute to EG. The study recommends that the government prioritize investments in health and education to empower individuals to actively participate in economic activities, thereby contributing to overall economic output. The research underscores the importance of human capital development, particularly in labor-surplus countries like Pakistan, to drive sustainable economic growth.