Analysing the productive mechanism of human capital in Pakistan: new insights from women’s empowerment

Purpose The purpose of this study is to examine a unique typology of women’s empowerment (WE) and its role in enhancing human capital development (HCD) and total factor productivity (TFP) in Pakistan. This study investigates how WE acts as both a moderating and mediating factor between human capital and economic growth, thereby improving the quality of life. Design/methodology/approach This study uses the Autoregressive Distributed Lag (ARDL) co-integration technique using annual data from 1990 to 2022. This approach allows for analysing both short- and long-run dynamics between WE, HCD and TFP, providing a macroeconomic perspective on the productive role of WE. Granger Causality tests are also applied to determine directional relationships among the variables. Findings Empirical results indicate that WE has significant moderating and mediating effects on TFP through HCD in both the short and long run. Granger Causality analysis reveals unidirectional causality from WE to TFP and from WE to HCD, highlighting the interactive and dynamic role of WE in fostering economic productivity. The findings of this study suggest that leveraging the potential of Pakistan’s female population can enhance human capital and improve the quality of life for future generations. Originality/value To the best of the author’s knowledge, this study is among the first to examine WE as a productive resource influencing HCD and TFP in Pakistan. This study provides novel insights for policymakers, emphasising the social and economic benefits of promoting women’s empowerment to achieve inclusive and sustainable economic growth.