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Education and Economic Growth: an Empirical Analysis of Interdependencies and Impacts Based on Panel Data

Author

Listed:
  • Liana SON

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

  • Graţiela Georgiana NOJA

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

  • Mihai RITIVOIU

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

  • Roxana TOLTEANU

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

Abstract

The paper focuses particularly on proving that education can lead to economic growth within five groups of EU Member States. Our study reviews the human capital from its quantitative (years of study) and qualitative (education quality) dimensions, the empirical panel data analysis being based on three double-log models developed and processed through random and fixed effects. The main explanatory variables comprise the GDP per capita, the physical capital, the average number of years of schooling (for all three levels, especially tertiary education), the quality of education measured through scores on skill tests, the degree of international openness, life expectancy and inflation rate. Our results highlight that education is extremely important in positively influencing economic growth. Within this framework, the results emphasize that within the European Union there is a strong positive influence of education on economic growth, expressed mainly through an increase in GDP per capita growth rate, especially when the human capital is expressed by qualitative variables, while the quantitative variable’s importance is being greatly reduced.

Suggested Citation

  • Liana SON & Graţiela Georgiana NOJA & Mihai RITIVOIU & Roxana TOLTEANU, 2013. "Education and Economic Growth: an Empirical Analysis of Interdependencies and Impacts Based on Panel Data," Timisoara Journal of Economics and Business, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 6(19), pages 39-54.
  • Handle: RePEc:wun:timjeb:tjeb:v06:y2013:i19:a03
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    References listed on IDEAS

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    1. Hanushek, Eric A. & Woessmann, Ludger, 2007. "The role of education quality for economic growth," Policy Research Working Paper Series 4122, The World Bank.
    2. Altinok, Nadir & Murseli, Hatidje, 2007. "International database on human capital quality," Economics Letters, Elsevier, vol. 96(2), pages 237-244, August.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    4. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    5. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    6. Paul Atherton & Simon Appleton & Michael Bleaney, 2013. "International School Test Scores And Economic Growth," Bulletin of Economic Research, Wiley Blackwell, vol. 65(1), pages 82-90, January.
    7. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    8. Albu, Lucian Liviu, 2007. "Modelarea si evaluarea impactului investitiilor directe, nationale si internationale asupra pietii muncii si evolutiei macroeconomice din Romania - Modele macroeconomice - studiu de sinteza," Working Papers of Macroeconomic Modelling Seminar 071501, Institute for Economic Forecasting.
    9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Abdalali Monsef & Abolfazl Shahmohammadi Mehrjardi, 2015. "Investigation Development Degree of Esfahan Province of Iran in Terms of Educational Indices," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 5(1), pages 37-44, January.

    More about this item

    Keywords

    Human capital; economic growth; education; schooling; knowledge.;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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