Open AccessFinancial Development and Human Capital in South Africa: A Time-Series Approach
Author(s) -
M. N. Lukmanul Hakeem,
Oluwatoyin Oluitan
Publication year - 2012
Publication title -
research in applied economics
Language(s) - English
Resource type - Journals
ISSN - 1948-5433
DOI - 10.5296/rae.v4i3.1498
Subject(s) - causality (physics) , human capital , economics , financial capital , capital formation , monetary economics , finance , economic growth , physics , quantum mechanics
This is a time-series study that investigates the relationship between human capital and financial development in South Africa for the period of 1965-2005. The paper uses four measures each for both financial development and human capital. With M2 as financial indicator, the results suggest two possible directions of causality, one from human capital to financial development, and evidence of reverse causality for different measures of human capital.
With liquid liability as financial indicator, it suggests one-way directional causality from human capital to financial development. Summarily, the results suggest evidence of bi-directional causality, and that income is a possible transmission mechanism.