A Richer Central America, an Improved Society? The Effect of Economic Growth in Central America Social Development

Abstract

This research examines the relationship between Economic Growth and Social Development in Central America, over the period 1992-2012. Using a Granger Causality Model and a Panel-data Methodology, to measure the relation of economic growth and social development in the areas of population, health, labor force, poverty and education. With the purposes of identifying which areas have a significant change with GDP growth and which areas do not have a significant relation. The results of the conducted research show that in Central America economic growth and social development have a strong relation, but when evaluating economic growth and each of the social development areas, this research found that as expected economic growth has a strong relation with population, poverty and labor force, at the same time there is no relation between economic growth and some of the most important areas that drive countries through economic development, such as health and education.