The interaction of human and physical capital accumulation: Evidence from Sub-Saharan Africa

In this paper, a simultaneous model of the evolution of human and physical capital in Sub-Saharan Africa is estimated. It can be shown that the two types of capital are jointly endogenous, in that increases in human capital significantly raise the per-worker physical capital stock, and increases in the physical capital significantly raise primary education levels. Unlike the implications of other recent papers, there is no evidence that tropical climates and ethnic diversity have a negative effect on the accumulation of capital in the region.