Bangladesh Bank Training Academy Journal

Abstract

This study examines the impact of institutional quality, unemployment, and the dependency ratio on human development in Bangladesh from 1996 to 2022. Using ARDL models, the findings reveal that both unemployment and the dependency ratio negatively affect the Human Development Index (HDI) in the long term. Institutional quality, measured by three different indicators, shows no significant impact on HDI in any model. In the short run, only one dependency ratio coefficient is significant, with a negative effect across all models. Granger causality tests indicate that causalities run from institutions to both HDI and the dependency ratio, while the dependency ratio Granger causes HDI in all models. One model uniquely shows that unemployment Granger causes institutional quality. Policy recommendations emphasize reducing unemployment and managing the dependency ratio to improve human development, alongside strengthening institutions to support these efforts.