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Government expenditure on education and economic growth: a panel data analysis

Author

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  • Md. Mizanur Rahman
  • Tahsin Binta Anis

Abstract

The fiscal policy of the government determines the long-run economic growth through optimal decisions on government expenses. For robust economic growth and prosperity, efficient allocation of resources is a necessary condition. An efficient labor force will refer to high productivity and high economic growth. The main reason for expecting a link between education and economic growth is straightforward. Education certainly enhances efficiency, which increases productivity and is a precondition for long-run economic growth. This work attempted to find the correlation between public spending on education and economic growth and the magnitude of this relationship. In the analysis, panel data of 63 countries were chosen randomly from each continent from 1981 to 2010. This study also included other variables that impact economic growth, including inflation rate, unemployment rate, Foreign Direct Investment, total export, and capital formation. The study revealed a significant positive correlation between public spending on education and economic development.

Suggested Citation

  • Md. Mizanur Rahman & Tahsin Binta Anis, 2023. "Government expenditure on education and economic growth: a panel data analysis," Journal of Community Positive Practices, Catalactica NGO, issue 2, pages 30-46.
    • Handle: RePEc:cta:jcppxx:2233
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    References listed on IDEAS

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