Effect of social infrastructure investment on economic growth and inequality in South Africa: a SEM approach

Itumeleng More and Goodness C. Aye

International Journal of Economics and Business Research, 2017, vol. 13, issue 2, 95-109

Abstract: This paper investigates the effect of social infrastructure on economic growth and inequality in South Africa using a SEM approach. We use growth as the mediating variable while controlling for production factors, urbanisation and globalisation. Results show a positive and significant relationship between education expenditure and growth. However there is a negative but insignificant relationship between health expenditure and growth. Furthermore, results indicate a negative but insignificant relationship between education and inequality and a significant negative relationship between health and inequality. Consistent with the Kuznets theory, we find a positive and significant relationship between growth and inequality in South Africa.

Keywords: education expenditure; health expenditure; inequality; SEM; South Africa; social infrastructure investment; economic growth; structural equation modelling; production factors; urbanisation; globalisation. (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:13:y:2017:i:2:p:95-109

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