The Relationship Between Education Investments And Economic Growth In Turkey

Today, economic growth still maintains its important position in national economies worldwide. Thus, economists try to explore the possible reasons of different patterns of economic growth among countries. It is widely accepted that once dominant Neo Classic approach to economic growth has failed to explain these differences so far. Since the earlier times of economics science, human capital has been considered the most important component of production. However, recently, qualified labor force has started to replace human capital as the most important component. The most recent growth models suggest that country’s human capital, foreign trade policy, the level of financial development and public expenditures are highly influential on economic growth. This study aims at exploring the relationship between economic growth and investments on education, a clear indicator of the presence of human capital, in Turkish context. The method used in the present study is Granger Causality Test. The results of the study show that there is no reciprocal causality relationship between the growth in Turkish economy and investments made on education. One-way causality relationship is found only from educational investment to economic growth. No relationship is found from economic growth to educational investments.