Panel Data Analysis of Human Development, Income Inequality and Economic Growth in the SAARC Countries During 1990-2020

Abstract

The present study is undertaken to analyze human development, income inequality and economic growth in the SAARC countries, along with china, during 1990 to 2020 using dynamic panel data models. The Hausman test was used to choose between Fixed Effect (FE) or Random Effect (RE) models. The major findings include that income inequality (G) negatively affect human development (HD), whereas, economic growth (EG), Gender Development Index (GDI) and mean year of schooling (MYS) positively affect human development (HD). On the other hand, control of corruption (CC), G and HD accelerate EG, and population growth per annum (P) slow down the rate of EG in the panel of countries. Moreover, EG significantly increases the G, and agriculture area as percentage of total land area (AGL) and HD negatively and significantly affect income inequality (G) in the sample of countries. Summing up, human development positively and significantly accelerates economic growth, and economic growth enhance the level of human development ranking of the sample countries. Moreover, human development measure also significantly reduces income inequality.