Analyzing The impact of Human Capital Investment on Algeria’s Economic Development (1990–2023)

Abstract

This study aims to analyze the impact of human capital investment on economic development in Algeria from 1990–2023, focusing on government spending on education (GE) and health (GH) as key indicators of such investment. A descriptive-analytical method was adopted, supported by advanced statistical tools, including correlation coefficients, multiple regression models, and time-series analysis. Python programming was used for data processing and graphical representation of the results. The variables examined include GDP per capita (GDPPC) as an indicator of economic development, in addition to education and health expenditures, labor force (L), capital stock (K), and annual inflation rate (IN). The results revealed a strong positive correlation between spending on education, health, and economic development, with correlation coefficients of 0.97 and 0.96, respectively. Regression models showed that each additional billion Algerian dinars spent on health and education increased GDPPC by 471 and 342 units, respectively. In contrast, inflation was found to hurt economic development. The study recommends enhancing investment in education and health while improving their quality and controlling inflation rates to ensure sustainable economic development.