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

  • Liana SON West University of Timisoara
  • Gratiela Georgiana NOJA <p>West University of Timisoara</p>
  • Mihai RITIVOIU
  • Roxana TOLTEANU <p>West University of Timisoara</p>
Keywords: Human capital, economic growth, education, schooling, knowledge

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.

Author Biographies

Liana SON, West University of Timisoara

Faculty of Economics and Business Administration

Department of Marketing and International Economic Relations

Professor PhD.

Gratiela Georgiana NOJA, <p>West University of Timisoara</p>

Faculty of Economics and Business Administration

Department of Marketing and International Economic Relations

Lecturer PhD

Mihai RITIVOIU

Faculty of Economics and Business Administration

PhD. Student
Roxana TOLTEANU, <p>West University of Timisoara</p>

Faculty of Economics and Business Administration

PhD. Student

References

Adams, R. (2002). Social Policy For Social Work. Basingstoke: Palgrave.

Altinok, M. (2007). International Database on Human Capital Quality. Economics Letters, 96(2), 237-244.

Albu, L. (2007). Modelarea şi evaluarea impactului investiţiilor directe, naţionale şi internaţionale asupra pieţei muncii şi evoluţiei macroeconomice din România. Modele macroeconomice - studiu de sinteză, Institutul de Prognoză Economică al Academiei Române, Bucureşti, 5-28.

Atherton, P., Appleton, S., & Bleaney, M. (2009). International School Test Scores and Economic Growth. Credit Research Paper, no. 09/04, 1-26.

Barro, R. (1991). Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics, 106(2),  407-143.

Barro, R., & Lee, J. W. (1994). Sources of Economic Growth. Carnegie-Rochester Conference Series on Public Policy, vol. 40, 268-289.

Barro, R., & Sala-i-Martin, X. (1995). Technological Diffusion, Convergence and Growth. CEPR Discussion Papers no. 1255, 1-26.

Barro, R. (2000). Education and Economic Growth. International Handbook on the Economics of Education, 1-36.

Barro, R., & Lee, J. W. (2011). A New Data Set of Educational Attainment in the World 1950-2010. NBER Working Paper 15902, 101-146.

Benhabib, J., & Spiegel, M. (1994). The role of human capital in economic development. Evidence from aggregate cross-country data. Journal of Monetary Economics, 34, 143-173.

Bose, N., Haque, E., & Osborn, D. (2007). Public Expediture and Economic Growth: A Disaggregated analysis for developing countries. The Manchester School, 75(5), 533-556.

Dumont, J. C. (1999). La contribution des facteurs humains à la croissance: revue des études empiriques, Cahier de recherche no. 99-10, CREFA, Université de Laval, 1-18.

Fischer, S. (1993). The Role of Macroeconomic Factors in Growth. NBER Working Papers 4565, National Bureau of Economic Research, 1-36.

Frisch, R., & Tinbergen, J. (1933). Propagation problems and impulse problems in dynamic economics. Economic Essays in Honour of Gustav Cassel, 171–205.

Hanushek, E., & Wöβmann, L. (2007). Education Quality and Economic Growth. World Bank Working Paper 39511, 1-38.

Hanushek, E., & Wöβmann, L. (2007). The Role of Education Quality in Economic Growth. World Bank Policy Research Working Paper 4122, 1-29.

Hanushek, E., & Kimbo, D. (2000). Schooling, Labor-Force Quality, and the Growth of Nations. American Economic Review, American Economic Association, 90(5), 1184-1208.

Heston, A., Summers, R., & Aten, B. (2012). Penn World Table Version 7.1. Center for International Comparisons of Production, Income and Prices, University of Pennsylvania.

Islam, N. (1995). Growth Empirics: A Panel Data Approach. The Quarterly Journal of Economics, 110(4), 1127-1170.

Levine, R., & Renelt, D. (1992). A Sensitivity Analysis of Cross-Country Growth Regressions. The American Economic Review, 82(4), 942-963.

Lucas, R. (1988). On the Mechanics of Economic Development.  Journal of Monetary Economics, 1(22), 3-42.

Mankiw, G., Romer, P., & Weil, D. (1992). A contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics, 107(2), 407-437,

Mileva, E. (2008), The impact of capital flows on domestic investment in transition economies, Working Paper Series 871, European Central Bank, 1-18.

Nelson, R., & Phelps, E. (1966). Investment in Humans, Technological Diffusion, and Economic Growth. The American Economic Review, 56(1/2), 69-75.

Pritchett, L. (1996). Population Growth, Factor Accumulation, and Productivity. World Bank Publications, 1567, 1-33.

European Commssion (2012). EU High Level Group of Experts on Literacy. Final Report, September 2012. Retrieved from http://ec.europa.eu/education/literacy

Eurostat, Statistics 2012. Retrieved from www.eurostat.eu

OECD (2010). Programme International de l'OCDE pour le suivi des eleves, Resultats du PISA 2009, Paris. Retrieved from www.oecd.org

Published
2013-08-16
How to Cite
SON, L., NOJA, G. G., RITIVOIU, M., & TOLTEANU, R. (2013). Education and Economic Growth: an Empirical Analysis of Interdependencies and Impacts Based on Panel Data. Timisoara Journal of Economics and Business, 6(19), 39-54. Retrieved from http://tjeb.ro/index.php/tjeb/article/view/TJEB19_Aug2013_39to54
Section
Articles