A comparative study of the impact of education on economic growth in 49 selected developing countries

Abstract

This paper estimates the potential impact of human capital, proxied by government expenditures on education, on economic growth. A panel data regression analysis is employed to investigate this association, utilizing yearly data from 2005 to 2010 across 49 selected developing countries. The regression model employs fixed effects and random effects and includes corrections for panel heteroskedasticity and serial correlation. A vector of other independent variables is utilized to account for other factors that could affect GDP growth based on those suggested by other studies. The fixed effects results suggest a positive but statistically insignificant relationship between government expenditure on education and GDP growth (annual %). Conversely, the random effects results suggest an insignificant negative relationship between government expenditure on education and GDP growth (annual %). These results raise questions regarding the productive utilization of education within society and prompt further inquiries into the efficiency of education in developing countries.