An Empirical Analysis of Foreign Remittances, Education Index, and Human Development in Kenya
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Date
2023
Authors
Musyimi, Daniel Mutuku
Ng’ang’a, Peter
Journal Title
Journal ISSN
Volume Title
Publisher
EAJBE
Abstract
Every government pursues high living standards, appropriate education,
and better-quality general wellbeing of its citizens. It is feasible that an
economy on the right course of attaining sustainable development goals
could flourish in human richness. Kenya endeavours to advance the
wellbeing of her people. There has been a rise in human development from
0.468 human development index in 1990 to 0.575 in 2021. This is a
22.86% increase. However, this is low compared to economies with high
levels of human development. Kenya is classified at the medium level,
below the standards stipulated by the United Nations Development
Programme. This classification recommends economies have a high or
very high human development index. Numerous studies in Kenya have
focused on foreign remittances and education expenditure. This offers
diminutive consideration to remittances and human development. This
paper seeks to fill this gap by focusing on foreign remittances, education
index and human development. This area has only received derisory
attention even though foreign remittance has been one of the crucial
financial foreign inflows in the country. The paper espouses a nonexperimental research design to explain the effects of foreign remittances
on human development by dint of education index conduit. The vector
error correction model, a cointegrated vector autoregression model, is
applied in this research to analyse data. This establishes a short-term
relationship between foreign remittances and the education index while
correcting the deviation from the long-term movement of these variables.
Secondary time series data for the period 1990 to 2021 is used. Statistical
analysis was conducted using E-views statistical package. This paper
concludes that foreign remittances in Kenya have negative and significant
effects on the education index in the short run. This indicates that a vast
amount of remittances received in Kenya are not channelled to
educational purposes. The long-run impact is statistically inconclusive.
Description
Article
Keywords
Foreign Remittances, Human Development, Education Index, Education & Inequality, Economic Development, General Welfare, Human Wellbeing
Citation
Musyimi, D. M. & Ng’ang’a, P. (2023). An Empirical Analysis of Foreign Remittances, Education Index, and Human Development in Kenya. East African Journal of Business and Economics, 6(1), 211-225. https://doi.org/10.37284/eajbe.6.1.1299