FACTORS AFFECTING HUMAN DEVELOPMENT: A PANEL DATA ANALYSIS FROM 1990-2017

Abstract

This study aims to identify key factors that have influenced human development from 1990 to 2017. Using the Human Development Index (HDI) as the dependent variable and renewable energy consumption, total CO2 emissions, official development assistance, mean years of schooling, life expectancy at birth, employment to population ratio, and population as independent variables, the study employs panel data analysis and panel causality techniques to analyze the data. The findings reveal that all independent variables in the study model are significant determinants of human development. Renewable energy consumption, CO2 emissions, official development assistance, mean years of schooling, life expectancy at birth, and employment to population ratio positively affect HDI, while population has a negative impact. The study also identifies a bidirectional causality between renewable energy consumption and HDI, official development assistance and HDI, mean years of schooling and HDI, and employment to population ratio and HDI for the entire panel. The study contributes to the literature by shedding light on how development differs from economic growth and how it can be achieved through structural transformation, social and economic progress, and increased per capita output. It emphasizes that the freedom to contribute to economic, social, health, environmental, and cultural development should be increased for human-oriented development. The study highlights the significance of renewable energy consumption and its positive impact on human development by ensuring that scarce resources are not depleted and destroyed, and conserving scarce resources as a method of alleviating poverty. The findings also emphasize the importance of reducing CO2 emissions and the role of official development assistance, mean years of schooling, life expectancy at birth, and employment to population ratio in achieving human development.