Essays on Economic Growth, Poverty and Child Educational Performance in Africa

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Addis Ababa University


This doctoral dissertation consists of an introduction and three independent single-author papers on economic growth, poverty and child educational performance in Africa. The introduction introduces the rest of the chapters and the motivation for studying these aspects and the contributions that the three papers make to existing literature. The dissertation has three standalone papers which were written so that they would eventually be published as separate articles in academic journals. Previous versions of these papers have been published as chapters in three different books published by Palgrave Macmillan, Routledge and Springer. The first paper studies the role of financial development and institutional quality in economic growth in an era of globalization based on the dynamic common correlated effect (DCCE) method in 40 African countries over the period 1980-2014. The overall financial development measure is calculated as an average of indices measuring the extensiveness of financial institutions and financial markets. The financial institutions index includes information on banks, insurance companies and pension and mutual funds, while the financial markets index includes information on stock and bond markets. This paper studies financial depth, access and efficiency of both financial institutions and financial markets. Its empirical findings show that overall financial development had a positive and significant effect on long-term economic growth in the entire sample. However, the effects of financial development in terms of financial depth, access and efficiency and its sub-components on economic growth varied across different levels of economic development and across the two dimensions of financial development -- extensiveness of financial institutions and of financial markets. The second paper analyzes the differentiated relationship between trade liberalization and poverty in 43 African economies over the period 1980-2014. It uses the augmented mean group (AMG) estimator which allows for parameter heterogeneity and cross-sectional dependence in its panel common-factor estimates to avoid biased and inconsistent estimates. Its findings show that generally speaking trade openness had a positive and significant relationship with poverty reduction. However, country-specific empirical results show that the effect of trade openness on poverty varied across countries. This suggests that the effect of trade liberalization on poverty is heterogenous and depends on country-specific trade policy and poverty reduction strategies. The third paper provides a micro-panel analysis of the impact of child nutrition, health and household wealth on children’s educational performance as measured by the Peabody Picture Vocabulary Test (PPVT) score in Ethiopia. The study uses the second and third rounds of longitudinal data from the Young Lives survey in Ethiopia on two cohorts of children. The survey covered 1,792 children aged around 5-years and 444 children aged around 12-years in 2006. The same children were covered in 2009 and are included in my analysis. The results show that the child-nutrition-and-health indicator had a positive and significant effect on child cognitive skills for the younger cohort, while it had an insignificant effect on the older cohort. The study also found that the household wealth index had a positive and significant relationship with children’s educational performance for all ages considered in the study. Furthermore, the findings also show that child labor had a negative effect on a child's academic achievements in the older cohort, and this effect was stronger for girls than it was for boys of similar ages.



African countries, Child educational performance, Dynamic heterogeneous, Economic Growth