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382053

The Relationship Between Education and Economic Growth in Egypt Using Vector Auto Regression (VAR)

Article

Last updated: 05 Jan 2025

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Abstract

The study investigates the impact of education on economic growth during the period (1976-2022) where education represents a channel for human capital improvement that fosters economic growth. Vector Auto Regression (VAR) and testing causality in the long run through the Toda & Yamamoto (TY) causality test, dynamic analysis through impulse response functions analysis, and Variance Decomposition analysis were used in examining the relationship between economic growth and education. Education is measured by enrollment rate in higher education, and government expenditure on education while GDP growth rates are used as a proxy for the economic growth in Egypt during the period (1976-2022). Our main findings reveal that a shock to government investment in education led to a positive response of growth in the short and long run. The results asserted a positive relationship between education as measured by the enrollment rate of higher education and economic growth. For the causality test, there is a one-way causality running from the government expenditure on education to economic growth in the long run and a uni-directional relationship running from the government expenditure on education, economic growth, and foreign direct investment to the enrollment rate in higher education in the long run. The research recommends that the government should increase spending on education to promote economic growth both in the short and long run, encourage the expansion of higher education, and enhance the coordination between educational outcomes and labor market requirements.

DOI

10.21608/asfer.2024.306172.1027

Keywords

education, Economic growth, Vector Auto Regression

Authors

First Name

Marwa

Last Name

Mohamed Ali

MiddleName

-

Affiliation

Faculty of Economic Studies and Political Science, Alexandria University, Egypt, Imam Muhammad bin Saud Islamic University Kingdom of Saudi Arabia

Email

marwa_mohali@yahoo.com

City

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Orcid

-

First Name

Maha

Last Name

Asfour

MiddleName

-

Affiliation

Faculty of Economic Studies and Political Science, Alexandria University, Egypt,

Email

maha.asfour82@gmail.com

City

-

Orcid

-

Volume

33

Article Issue

2

Related Issue

50383

Issue Date

2024-09-01

Receive Date

2024-07-21

Publish Date

2024-09-01

Print ISSN

1110-8274

Online ISSN

2974-4792

Link

https://asfer.journals.ekb.eg/article_382053.html

Detail API

https://asfer.journals.ekb.eg/service?article_code=382053

Order

2

Type

المقالة الأصلية

Type Code

2,137

Publication Type

Journal

Publication Title

بحوث اقتصادية عربية

Publication Link

https://asfer.journals.ekb.eg/

MainTitle

The Relationship Between Education and Economic Growth in Egypt Using Vector Auto Regression (VAR)

Details

Type

Article

Created At

28 Dec 2024