Investment in Human Capital and Subjective Well‐Being in African Economies: Effect and Transmission Channels

ABSTRACT Human capital investment and subjective well‐being are central elements of sustainable development, aligning closely with the aspirations of SDG 3 (Good Health and Well‐Being), SDG 4 (Quality Education), and SDG 8 (Decent Work and Economic Growth). Yet, in many African economies, persistent gaps in education, health outcomes, and life satisfaction raise questions about whether improvements in human capital effectively translate into enhanced well‐being. Despite growing interest in well‐being research, empirical evidence on this linkage in the African context remains limited, especially regarding the mechanisms through which human capital influences subjective well‐being. In an attempt to fill this gap and provide actionable solutions, the present study examines the effect of human capital investment on subjective well‐being across 36 African countries over the period 2012–2021. Using the two‐step system GMM estimator addressing endogeneity and dynamic relationships, the findings reveal that human capital investment exerts a positive and significant effect on subjective well‐being. The study further identifies control of corruption and foreign direct investment as key transmission channels that strengthen this relationship. Overall, the analysis provides evidence‐based policy recommendations to guide African governments and regional institutions toward strategies that enhance human development and improve well‐being across the continent.