The Impact of Remittance Inflows on Human Capital Development: Exploring the Mediating Role of Education and Healthcare Accessibility in African Developing Economies

Introduction: This study explores how access to education and healthcare influences the relationship between remittance inflows and human capital development in developing Sub-Saharan African (SSA) countries. Given the growing importance of remittances in financing development, understanding their potential to enhance human capital is critical. Method: The study employed the POLS, fixed effect, and random effect models using annual data from 2010 to 2023 for 21 developing SSA countries. Key variables examined include remittance inflows, access to education, healthcare accessibility, government expenditure on education and health, governance quality, labour force participation, and skill levels. Results or Findings: The results reveal that remittance inflows significantly promote human capital development in SSA. Moreover, increased access to education and improved healthcare further amplifies this positive effect. Good governance also enhances the impact of remittances on human capital development. Conversely, public spending on education and health had a negative effect, likely due to corruption, lack of transparency, and poor policy alignment. Additionally, while higher labour force participation supports human capital development, a rise in the proportion of low-skilled individuals hinders it. Discussion or Conclusion: The study concludes that remittances can be a valuable tool for fostering human capital development when complemented by effective governance and improved access to education and healthcare. Policymakers are advised to implement targeted programs to channel remittances into education and health, improve the quality and accessibility of these services, ensure accountability in public spending, and invest in skills development, particularly for youth and women, to harness the full potential of human capital in SSA countries.